Gunnebo-Annual-Report-2014

Transcription

ANNUAL REPORT 2014
services and solutions with an offering covering cash handling, safes
and vaults, entrance security and electronic security for banks, retail,
CIT, mass transit, public & commercial buildings, and industrial
& high-risk sites.
The Group has an annual turnover of €610 million and 5,700
employees in 33 countries across Europe, the Middle East & Africa,
Asia-Pacific and the Americas as well as a network of Channel Partners
Gunnebo Annual Report 2014
The Gunnebo Security Group is a global supplier of security products,
on 100 additional markets.
For a safer world.
TAKING
SECURITY
INTO THE FUTURE
Gunnebo is a global supplier with a broad offering covering
cash handling, safes and vaults, entrance security and electronic
security, as well as security-related services.
Highlights for 2014
Order intake amounted to MSEK 5,433 (5,514), organically a
decrease of 5%.
Net sales increased to MSEK 5,557 (5,271), organically they
increased by 2%.
Share of Group sales:
66%
18%
16%
Operating profit increased to MSEK 352 (222) and the operating
margin to 6.3% (4.2%).
Operating profit excluding items of a non-recurring nature of
MSEK –14 (–84) increased to MSEK 366 (306) and the operating
margin to 6.6% (5.8%).
Profit after tax for the period increased to MSEK 227 (102).
Earnings per share were SEK 2.98 (1.29).
EMEA
Asia-Pacific
Americas
Free cash flow increased to MSEK 223 (144).
In June 2014, the French subsidiary Fichet-Bauche Télésurveillance
was divested with a capital gain of MSEK 73, which is entered
under operating profit as an item of a non-recurring nature.
Share of Group EBIT excluding
items of a non-recurring nature:
30%
38%
32%
On August 28, 2014 Gunnebo acquired the Mexican company
Diseños Inteligentes de Seguridad S.A. de C.V. (Dissamex).
On October 10, 2014 Gunnebo acquired the British company
Clear Image, which operates in electronic security.
The Board proposes a dividend of SEK 1.00 (SEK 1.00) per share.
EMEA
Key Ratios
2014
2013
5,557
5,271
366
306
6.6
5.8
352
222
6.3
4.2
Earnings per share after dilution, SEK
2.98
1.29
Net debt excluding pension commitments, MSEK
613
728
35
34
Net sales, MSEK
Operating profit/loss exc. items of a non-recurring
nature, MSEK
Operating margin exc. items of a non-recurring
nature, %
Operating profit, MSEK
Operating margin, %
Equity ratio, %
Asia-Pacific
Americas
No. of employees
by Region:
50%
38%
12%
EMEA
Asia-Pacific
Americas
A vision to be the leading global
provider of a safer future
Contents
The Gunnebo Group
Customers and Markets
2
Brands3
Comments by the CEO
4
Highlights 2014
6
Strategy8
The Security Market
10
The Business
Offering12
Regions14
Region Europe, Middle East & Africa
16
Region Asia-Pacific
20
Region Americas
23
Sustainable Business
8–9
Operations26
Corporate Responsibility
30
People and Leadership
31
Environmental Management
32
Corporate Governance
Corporate Governance Report
Auditor’s Statement
Board of Directors
Group Executive Team
34
41
42
43
Risk and Sensitivity Analysis
44
Financial Reporting
14–15
Continued growth and
geographical expansion
Increased profitability through
higher production efficiency
26–27
Board of Directors’ Report
48
Definitions52
Group Income Statements
53
Group Statement of Comprehensive Income 53
Group Balance Sheets
54
Change in Group Equity
56
Group Cash Flow Statements
57
Parent Company Income Statements
58
Parent Company Statement
of Comprehensive Income
58
Parent Company Balance Sheets
59
Change in Parent Company’s Equity
61
Parent Company Cash Flow Statements
62
Notes63
Proposed Distribution of Earnings
87
Auditor’s Report
88
Capital Market
Information for the Capital Market
The Gunnebo Share
Five-Year Review
89
92
94
Contact Details
Gunnebo Glossary
96
97
This document is essentially a translation
of the Swedish language version. In the event
of any discrepancies between this translation
and the original Swedish document, the latter
shall be deemed correct.
The Gunnebo Group
Customers
Markets
Bank
EMEA (Europe, Middle East & Africa)
Core offering: solutions for secure and efficient cash
handling, the storage of valuables and entrance security. Customers include Bank of China, Citibank, HSBC,
ING Bank, Nordea and Standard Bank.
Sales companies (21): Austria, Belgium, Czech Republic,
Denmark, Finland, France, Germany, Hungary, Ireland, Italy,
Luxembourg, Middle East (UAE), Netherlands, Norway, Poland,
Portugal, South Africa, Spain, Sweden, Switzerland, UK.
Retail
Core offering: solutions for secure and efficient cash
handling, loss prevention, the storage of valuables and
entrance security. Customers include Aldi, Auchan,
Carrefour, Coop, Decathlon and Walmart.
The economic instability in Europe in recent years has resulted in
lower demand in Region EMEA, and the Group has had to adapt
its cost structure accordingly. There has been a greater focus
within the region on growth markets outside of Europe.
Read more on pages 16–19
Asia-Pacific
CIT (Cash in Transit)
Core offering: solutions for the secure collection and
storage of cash. Customers include Brinks, G4S, Loomis
and Prosegur.
Mass Transit
Core offering: solutions for the control of passenger
flows and fare collection on public transport systems.
For airports, Gunnebo provides security solutions for
boarding, immigration control and anti-return control.
Customers include the public transport networks of
Beijing, Bogotá, Melbourne and New Delhi, and airports in Bahrain, Boston, London, Madrid and Sydney.
Public & Commercial Buildings
Core offering: solutions for access control and solutions for the storage of valuables. Customers include
the European Commission, Honeywell, Hyundai
Information Technology and Siemens.
Sales companies (8): Australia, China, India, Indonesia, Malaysia,
New Zealand, Singapore, South Korea.
The fastest growing region for Gunnebo where it has expanded
its presence considerably in recent years. Gunnebo will continue
to develop its strong market position here and invest in new
growth opportunities.
Americas
Sales companies (4): Brazil, Canada, Mexico, USA.
Gunnebo continues to grow in North and Latin America, where it
has made key acquisitions in the USA and Brazil and established
companies in Mexico in recent years.
Industrial & High-Risk Sites
Core offering: solutions for access control and solutions for the storage of valuables. Customers include
factories, logistics companies, power plants, arenas,
ports, prisons and casinos.
2
Heritage
Roots
1991
1994–1995
The Gunnebo brand has an
industrial heritage going
back 250 years to south-east
Sweden. Today Gunnebo
has sales companies in
33 countries and channel
partners in a further 100
markets around the globe.
In 1764, a forge is opened in the
Swedish village of Gunnebo. The
business grows steadily until the
formation of Gunnebo Bruks Nya
AB in 1889 which has several
factories supplying chains to the
shipping industry. This company
later becomes known as Gunnebo
Industries.
HIDEF Kapital AB is formed
by the Swedish government
as one of eight venture
capital companies charged
with investing in Swedish
companies suffering from
the national financial crisis.
Gunnebo Industries is acquired
by HIDEF, which changes its
name to Gunnebo AB and is
listed on the Swedish stock
exchange in 1994. The new
company will focus on delivering security products.
Brands
All sales companies within the Gunnebo Security Group carry the
Gunnebo name and the majority of security products, services and
solutions are sold under the Gunnebo brand, which also acts as an
umbrella brand.
Brand
Product Segment
Market
origin
Safes & Vaults
Global
UK. Founded 1835. Marketed and sold by
Gunnebo since 2000.
Outdoor perimeter security
Global
Germany. Founded 1951.
Acquired by Gunnebo in 2004.
Safes & Vaults
Global
France. Founded 1825.
Electronic article surveillance for retail
Global
Sweden. Founded 1984.
Safes & Vaults
North America
USA. Founded 1967.
Fire protection
India
India. Founded 1903. Marketed and sold by
Gunnebo since 2000.
Safes & Vaults
Global
Sweden. Founded 1886.
Acquired by Gunnebo in 1994
Closed cash handling
Global
Sweden. Acquired by Gunnebo in 2001.
Safes
India
India. Founded 1932.
1995–2005
2006–2008 2009–2010
2011–2014
Focus: Acquisitions
Gunnebo acquires around 40 companies specialising in security. Thin
includes Fichet-Bauche, a listed
company on the French stock exchange with a history in safes dating
back to 1825.
Focus: Integration
The acquisitions made over
the past 12 years are integrated into the Group and
adopt the name Gunnebo.
Focus: Growth and profitability
Gunnebo continues to move the
point of gravity to markets with
high growth potential within
its core business segment. The
Group expands its presence in
South Korea, Thailand, Malaysia,
USA, Mexico and Brazil.
Focus: Strategy and profitability
Gunnebo redefines its vision to
become the leading global provider of a safer future and divests
non-core business, Perimeter
Protection. The Group also starts
to focus on investing more in
growth markets outside of Europe.
3
The Gunnebo Group
Comments by the CEO
Focus on Costs Produces Results
Dear Shareholder,
Central to the development of Gunnebo’s
business is shifting the point of gravity in
terms of geographic focus, allocation of
resources, and increased customer value.
During 2014, we have continued to grow
our business outside of Europe. The proportion of sales on markets in the Middle East
and Africa, Asia-Pacific and Americas now
totals 41% (40%) of our sales. Our presence
in Latin American has been strengthened
through the acquisition of the Mexican service company Dissamex. We have also continued to establish ourselves on new markets
by opening representative offices in Oman,
Saudi Arabia, Nigeria, Turkey and Myanmar.
In terms of resource allocation, in 2014 we
have invested in greater production capacity
in India, and have continued efforts to reduce
our fixed cost base in Europe. We have sold a
part of our French operation, Fichet-Bauche
Télésurveillance, which we no longer considered to be part of our core business.
To strengthen customer value we launched
a number of new offerings during the
year in all of our product segments: Cash
Handling, Safes & Vaults, Entrance Security
and E
lectronic Security. The new generation
of SpeedStile entrance security gates which
were launched at the end of 2013 has been
well received by the market. To strengthen
our customer offering on the British market,
we acquired electronic security company
Clear Image during the year.
Financial results
The good sales growth in Region Asia-Pacific
continued during the year, albeit at a lower
level than previously. This slowdown is partly
due to elections in several of the Group’s
main markets in the region, which has an
impact on the business climate.
Although we noted weak sales development in Region EMEA, the market situation
did improve during the year. We are positive
about the future in EMEA, as developments in
2014 are a sign of stabilisation.
4
For Gunnebo, Region Americas is a growth
market. Sales in the region during the year
developed in line with last year, above all due
to a sluggish market in Brazil and restructuring in public administration in the USA.
During the year we have continued to
work on reducing our fixed costs in Europe.
Our efforts have produced results, and the
operating margin in Region EMEA more than
doubled during the year to 3.0% (1.4%). This
improvement is a result of a wide range of
large and small-scale measures linked to both
the sales organisation and our production
platform in Europe. Along with continued
good cost control in other regions, these
measures are a strong contributor to the improved operating margin. 6.6% is the strongest operating margin Gunnebo has reported
for many years.
We have also continued to strengthen our
cash flow, and the equity ratio was 35% at the
end of the year. This means that Gunnebo is
now financially strong and has scope to continue investing in growth where opportunities present themselves.
of safes and vaults made up one quarter of
the Group’s total sales.
Therefore, in 2014 we shifted focus. Safes
and vaults will remain an important part of
our business in future, but we see the main
growth in cash handling, both in terms of
sales and profitability. The foundation of our
business is to provide solutions that increase
efficiency and security in the cash handling
process for all players involved.
We began working with cash handling in
Europe and Australia several decades ago,
and at the time the primary customer segment was banks. Today cash handling is part
of our global business, and the majority of
orders come from CIT companies and retail.
Business in this area developed very well
during the year and now comprises one fifth
of the Group’s total sales, with satisfactory
profitability above Gunnebo’s target of a 7%
operating margin.
Business strategy 2016
– Cash handling in focus
Gunnebo continuously invests in the development of its employees on all levels. In 2014,
we have worked together to develop and
implement new core values, clearly linked to
performance and results. We call the platform Gunnebo’s Performance Cornerstones,
and it forms the basis for our employees’ personal development. With Gunnebo’s h
istory
of growth primarily through acquisitions,
these common core values are a vital building
block in creating sustainable global customer
offerings and collaborations that create value.
I am personally convinced that ‘soft’ investments also lead to good returns, if not in
the next quarter then in the longer term.
The Gunnebo Group currently has some
5,700 knowledgeable, dedicated employees
around the world. Without them we could
never have created value for our customers or
produced the results we have delivered to our
owners during the year. I would therefore like
During the year we drew up a strategic plan
which extends up to 2016. It entails a distinct
change in the way we view our future core
business.
Traditionally, Gunnebo’s core business
has been in safes and vaults, primarily for
banks and public administration. This is an
important foundation for our business in
the future too, especially on markets outside
of Europe. This business has enabled us to
develop partnerships with the majority of
the world’s major banks – relationships that
go back decades.
However, in recent years we have noticed
lower sales of certified safes and vaults, and
2014 was no exception. In Europe and North
America we are facing only modest market
growth moving forward, while we see the
slowdown in Asia as more temporary. Sales
Read more about our business strategy on
pages 8–9
Employees
to take this opportunity to thank them all for
their fine efforts in 2014!
I would also like to thank our customers
and partners for their faith in allowing us to
help evolve their business.
The future
In 2015 Gunnebo will continue to strengthen
its offering and its market positions primarily in cash handling, but as is clear from our
business strategy we will also continue to
cultivate and grow our business in safes and
vaults where possible, build on our strong
entrance security operation, and consolidate
our market position in electronic security
wherever in the world this represents major
business for us. We will also carry on focusing
on reducing our fixed cost base, primarily in
Europe, and streamlining our capital utilisation. And like most businesses, we will do our
best to increase sales and continue along our
set path with better profitability.
As communicated in early January, I will
be stepping down as President and CEO of
Gunnebo in summer 2015. I would therefore
particularly like to thank all our shareholders for your firm support whilst I have led
Gunnebo these past six years. I would also like
to wish my successor, Henrik Lange, the very
best of success in his new post.
Per Borgvall
President and CEO
Operating margin
6.6
%
The beneficial effects of cost adaptations combined
with a stabilised market have strengthened the
results for our business in Europe. Along with
continued good profitability in other regions, we
finished the year with an operating margin of 6.6%,
the strongest result for many years.
5
The Gunnebo Group
Highlights 2014
First Quarter
Second Quarter
Gunnebo holds its Capital Market Day in Stockholm,
Sweden, for analysts, fund managers, investors and journalists. Cash handling, entrance security and electronic security solutions are demonstrated live.
IMS Research recognises Gunnebo as the global number one
supplier of entrance gates in its “World Market for Entrance
Control Equipment” report. This is the fourth consecutive occasion Gunnebo has ranked as the world leader in this field.
The Group decides to invest a further MSEK 33 in 2014–15
to increase capacity and improve quality at its Indian production plant in Halol.
www.gunnebo.com is re-launched as a responsive website,
optimised for viewing on all devices, including tablets and
smartphones.
To support growth in Asia-Pacific, Gunnebo announces
the closure of its entrance security production facility in
Uckfield, UK and the transfer of production to Kunshan in
China.
Region EMEA
The French postal service, La Poste, strengthens its
partnership with Gunnebo through a general agreement
for electronic security.
Region Asia-Pacific
Gunnebo holds its Annual General Meeting for 2014.
Region EMEA
COOP in Sweden, Denmark and Norway signs a framework
agreement with Gunnebo for the delivery of the closed
cash handling system, SafePay™.
British pharmaceuticals company UDG Ltd. orders a large
strongroom for its plant in the UK.
Read more on page 19
Gunnebo receives an order worth over €2 million to deliver
over 16,500 safe deposit lockers and 15 vault doors to
Guanfu Museum in Shanghai, China.
The first cash handling order in Indonesia is received from
taxi operator, Express Group.
A branch office is opened in Oman to improve customer
service in the region.
Region Asia-Pacific
The first order for a vault and the automated safe deposit
locker system, SafeStore Auto, is received in Singapore.
Busan International Finance Center in South Korea signs an
order for entrance security.
Region Americas
Brazilian cash in transit company, Fidely’s, invests in a frontoffice cash handling solution from Gunnebo. The solution
reduces the time spent on cash management, minimises
the risk of robbery and prevents counterfeit notes being
accepted.
San Diego Stadium in the USA installs Gunnebo entrance
security solutions to control the flow of visitors to and from
the arena.
Gunnebo’s service centre in the US is expanded to serve
Canadian customers as well.
A nuclear power plant in China places an order for entrance
security.
Region Americas
SunTrust Bank unveils the latest in banking technology at
the SunTrust Plaza Garden in Atlanta, USA. Among the new
features is Gunnebo’s SafeStore Auto.
Gunnebo signs a three-year service and maintenance contract for security equipment with a major Canadian bank.
Quarterly Financial Summary
Net sales (MSEK)
Net sales (MSEK)
1,250
1,419
Operating profit (MSEK)*
38
98
Operating margin (%)*
3.1
6.9
* Excluding items of a non-recurring nature
6
Fichet-Bauche Télésurveillance (FBT) is divested from
Gunnebo France to Butler Group.
*Excluding items of a non-recurring nature
Third Quarter
Fourth Quarter
Gunnebo acquires all shares in Mexican security services company, Dissamex, giving the Group a market-leading position
within electronic security services to banks in Mexico.
Gunnebo acquires Clear Image, a provider of electronic
security solutions and security services in the UK.
Gunnebo receives the Delivery and Supply Chain Reliability
Award from one of its major customers, NCR, for exhibiting
outstanding on-time delivery performance.
Region EMEA
Banque de France signs a major order for vaults and
entrance security.
Newgate International places an order for vaults and
SDLs with Gunnebo UK.
Region Asia-Pacific
Gunnebo China receives an order from Huatai Securities
for entrance security for its offices.
Jilin Bank in China chooses Gunnebo’s automated safe
deposit locker system, SafeStore Auto.
Tianwan Nuclear Power Station in China places order for
entrance security, strengthening Gunnebo’s position as a
supplier of security solutions to high-risk sites.
Sejong City Government in South Korea once again chooses
Gunnebo to supply entrance security solutions.
Region Americas
Gunnebo receives a large order from a national bank in the
USA related to the increased automation of the customer
reception areas at 370 of its branches.
A major Canadian airport places an entrance security order.
Gunnebo launches a range of thermally-insulated security
doors designed to improve a building’s energy performance in line with the European Union’s Energy Efficiency
Directive (2012/27/EU).
Gunnebo’s plant in Halol, India wins a Gold Award at a Lean
Six Sigma Convention in recognition of the journey it has
made to improve production efficiency.
Region EMEA
La Poste and La Poste Immobilier in France renews a longterm agreement for the delivery of safes, locks and highsecurity doors.
Gunnebo receives an order for SafePay closed cash handling
systems from a major German retail chain with roll-out
planned for 2015.
Dubai’s largest CIT company, Transguard, places an order for
cash handling solutions with Gunnebo in the Middle East.
Region Asia-Pacific
G7 Safety Lockers in Malaysia continues to invest in
Gunnebo’s automated safe deposit locker system,
SafeStore Auto.
In connection with an upgrade to Beijing’s metro system,
Gunnebo receives a major entrance security order in China.
Sacha de La Noë is appointed the new SVP Region
Asia-Pacific and becomes a member of the Group
Executive Team.
Region Americas
The first delivery of Gunnebo’s cash handling systems
to a global CIT company in Brazil is completed.
Gunnebo receives an order for smart surveillance systems
from a grocery chain in Brazil.
Net sales (MSEK)
Net sales (MSEK)
1,314
82
6.2
1,574
148
9.4
7
The Gunnebo Group
Strategy
Into the Future with a Strong Core Offering
The Gunnebo Security Group is a global supplier of security products, services
and solutions with an offering covering cash handling, safes and vaults,
entrance security and electronic security for banks, retail, CIT, mass transit,
public & commercial buildings, and industrial & high-risk sites.
Vision
Gunnebo’s vision is to be the leading global
provider of a safer future.
Being a leading global provider means making a competitive offering available through
a global market presence on those markets
where customers want the Group’s products,
services and solutions.
Providing a safer future means taking a
long-term approach, investing in innovative research and product development, and
building lasting business relationships which
generate mutual value.
BUSINESS CONCEPT
Gunnebo’s business concept is to offer security
products, services and solutions that create
value for shareholders, customers, partners,
employees and society on a global scale.
Strategy
Gunnebo’s strategy is executed in the Group’s
regions and sales companies to ensure
that the needs of local customers in each
individual market are addressed and met.
Read more about the Group’s business,
market trends and development in the
different regions on pages 14–25
Gunnebo’s overriding strategy is focused on
its core customer offering supported by a
backbone strategy to move the Group’s point
of gravity.
8
Customer Focus
Cash Handling
Gunnebo’s intelligent cash handling solutions
are designed to reduce the time spent on cash
management, improve efficiencies in the cash
cycle and make cash handling more secure.
The Group has a keen understanding of
the cash handling processes performed by
retailers, CIT companies and banks as well
as other customers managing cash, such
as restaurants, casinos and taxi operators.
Gunnebo creates value for these partners in
the cash cycle by reducing the total cost of
cash handling and improving security for their
customers and staff.
Safes and Vaults
Under leading brands, such as Chubbsafes
and Fichet-Bauche, the Group produces highquality safes and vaults, certified to resist
burglary, fire and explosives.
Gunnebo can leverage its strong local
brands in this segment (see page 3, Brands).
Sales through its own companies are complemented by a strong global network of
Channel Partners.
Entrance Security
Gunnebo’s turnstiles and speed gates regulate and control the flow of people into and
out of public and commercial buildings, as
well as industrial and high-risk sites. Security
doors, partitions and windows also protect
high-risk sites from physical attacks.
In addition Gunnebo targets airports and
mass transit systems with a strong range of
solutions designed to simplify the flow of
passengers whilst maintaining the requisite
levels of security.
Electronic Security
Gunnebo’s innovative solutions for electronic
security consist of access control, intrusion
detection, CCTV, electronic locks and remote
surveillance systems.
Key customer segments include public
buildings, high-risk sites and banks which
require integrated and automated security
systems often operated from a central software platform.
Moving the point of gravity
The backbone strategy is to move the
Group’s point of gravity in terms of geography, resource allocation and value chain
development. By moving its point of gravity
geographically the Group will successively
generate a larger proportion of its sales from
growth markets rather than mature and
declining markets. Hand in hand with this
comes the movement of resources to ensure
that a larger proportion of the company’s
staff and expertise is located in these growth
markets. Finally, the Group is developing its
position in the value chain by becoming more
and more of a solutions provider which delivers not only security, but also added-value improvements to its clients’ business processes.
Financial goals
Gunnebo’s financial goals shall contribute
to a good return for the Group’s shareholders. They focus on profitable growth and the
operating margin.
Goals and Outcomes
Return on capital
employed*, %
Operating margin*, %
Equity ratio, %
Organic growth
invoiced sales, %
Longterm
goals
Outcome
2014
Outcome
2013
15
12.6
10.7
7
6.6
5.8
>30
35
34
5
2
1
* Excluding items of a non-recurring nature
Vision
What Gunnebo wants to be
Gunnebo will become the leading global provider of a safer future
Financial Goals
What the Group wants to achieve
15%
Return on capital employed of at least 15%
7%
An operating margin
of at least 7%
30%
An equity ratio of
no less than 30%
5%
Organic growth
of at least 5%
Strategy
How the Group will achieve it
Read more on pages 4–5 and 12–25
Customer Focus
Moving the Point of Gravity
The sales regions and sales companies
formulate and execute strategic business
plans for Gunnebo’s core offering:
Moving the point of gravity within
three aspects of the business:
Geographic focus
Cash Handling
Resource allocation
Safes & Vaults
Value chain
Entrance Security
Electronic Security
9
The Gunnebo Group
THE SECURITY MARKET
Growth, a Higher Standard of Living
and Urbanisation Drive the Market
The global security industry is extensive in its scope, covering a wide range
of products and services associated with the safety and protection of
businesses, people and assets. The market is fragmented and characterised
by a few sizeable global corporations operating alongside a large number of
smaller local suppliers.
The total value of the global security equipment market is estimated to be around SEK
700 billion. The market has shown growth of
around 4.5% over the past five years and is
expected to maintain a good rate of growth
in the years to come.
The underlying drivers behind the development of the security market are economic
growth, a higher standard of living, and urbanisation. A large part of the security market
comprises areas where Gunnebo does not
operate, such as security patrols and cash in
transit (CIT). The proportion of the market
where Gunnebo does operate is estimated
to be worth around SEK 480 billion and is
divided into the following product groups:
Cash Handling
The cash handling market segment encompasses players within bank, CIT, retail, restaurants, casinos and mass-transit companies. Gunnebo provides products, software
and services that improve efficiency and
security in the whole cash cycle for these
customers.
The global cash handling equipment market is estimated to be worth approximately
SEK 50 billion, divided primarily between
retail cash handling (40%), central cash
handling for banks and CIT companies (20%)
and self-service operations e.g. for depositing
and withdrawing cash (40%).
Trends show that the volume of cash in circulation will continue to grow on a global basis, despite the influence of online payment,
card payment and near-field communication
(NFC). Key market drivers for those who work
with cash are enhanced security, lower costs,
less shrinkage and improved productivity and
control, especially within the retail sector.
The installed base for intelligent retail cash
handling solutions is estimated at around
250,000 systems globally, with Americas
currently having the largest base. Gunnebo is
estimated to have a 5% global market share in
retail cash handling with strong positions in
Europe, Australia and Brazil. With the exception of Western Europe, Australia and the
USA, the market for cash handling is regarded
as less mature. The volume of cash in circulation is increasing and the demand from both
retailers and CIT companies for more efficient
cash handling solutions is rising.
Gunnebo’s competitors in retail cash
handling include Wincor, Glory and Tidel.
Another important part of the global
market for cash handling is ATM machines,
defined here as self-service cash deposit
and withdrawal. The global ATM market has
grown rapidly since the late 1980s and is
expected to continue to grow in the years to
come. Even though the banks in Europe have
decreased their investment in this part of the
market in recent years, there is strong growth
Market estimations in this section were taken from different sources, including “Safes & Vaults.
A Global Strategic Business Report of May 2014 from Global Industry Analysts, Inc.”; “The World
Market for Pedestrian Entrance Control Equipment of September 2013 from IHS”; “Planet
Retail”; “World Security Equipment of March 2013 from the Freedonia Group”. Estimated market sizes taken from the sources have been converted into SEK using an average exchange rate
from USD in 2014.
10 in Americas and Asia-Pacific. Annual growth
in the number of installed ATMs between
the years 2012 and 2018 is estimated at 6%
globally. The annual install volume of ATMs is
approximately 450,000 units, and there are
currently more than 3.5 million installed.
Gunnebo is a supplier of ATM safes and has
a considerable share of the market thanks to a
global production base. Players on this market
are NCR, Diebold and Wincor.
Safes and Vaults
The safes and vaults market segment encompasses safes, vaults, vault doors and safe
deposit locker (SDL) systems. Gunnebo has
been operating within the safes and vaults
business for more than 150 years through
strong global brands such as Chubbsafes and
Fichet-Bauche.
The global market for safes and vaults was
estimated at around SEK 22 billion in 2014,
with a forecasted annual growth of just over
5% up to 2020. Graded, or certified, safes are
an important part of Gunnebo’s business,
accounting for around one third of the total
world market for safes and vaults. The Group
is estimated to have a global market share of
12% in certified safes, and a quarter of the
European market.
The market for graded or certified safes
is predicted to have a lower growth pace
than safes without a grade or certification.
Development is driven by higher demand
from smaller organisations and private individuals, as well as the fact that some growth
markets have no certification requirements.
Key market drivers within the safes and
vaults segment are economic growth and
increased wealth, as well as a developing
financial infrastructure – especially on many
markets in Asia and Africa. This development leads to increased awareness about the
importance of protecting valuables against
fire and theft, both among businesses and
private individuals.
Another trend is that end customers are
demanding that a safe has some kind of integrated intelligence, such as connection to the
Internet. Moreover there is greater demand
for certified safes outside of the bank sector,
for example in pharmaceuticals and retail.
Gunnebo’s competitors in this segment
include Godrej and Diebold.
Entrance Security
The entrance security market segment includes speed gates, turnstiles and security
doors, as well as ticket gates for mass transit
systems and security gates for airports.
The global market for pedestrian entrance
security, which includes the product segments mentioned above, is estimated at
around SEK 4 billion, with Europe, Middle East
and Africa accounting for around 50% of the
total. Global growth over the next few years
is estimated at just under 5%.
Key market drivers for entrance security
are urbanisation, the expansion of inner-city
infrastructures such as metros and BRT (Bus
Rapid Transit), facilitation of mobility, and
increased cross-border movement of people.
Also a greater need for centralised security
and personnel checks, reduction of overheads
for receptionists and guards, as well as growing threats from terrorism and crime.
The top ten leading suppliers of pedestrian
entrance control equipment accounted for
more than half of the global market in 2012,
and Gunnebo was judged to be the leading supplier globally with a market share of
close to 12%. Gunnebo’s competitors in this
segment are Royal Boon Edam, Kaba and
Automatic Systems.
position as an integrator of electronic security solutions within the banking and public
administration sectors. In Europe the market
is expected to develop well, with anticipated
growth of 5% over the next three years.
Global growth is estimated at just over 7%.
Growth in electronic security is very much
driven by technological developments such
as IP innovation in CCTV systems. Customer
demand for integrated solutions, i.e. platforms that integrate several systems into one
solution, is also expected to be a strong driver
moving forward.
Gunnebo’s competitors in electronic security systems include Nedap, Lenel, Pacom and
Honeywell.
The Market by Segment
Cash Handling
Retail, 40%
Central cash handling for banks
and CIT, 20%
Self-service for deposit and
withdrawal of cash, 40%
40%
20%
33%
67%
40%
35%
45%
40%
40%
Safes & Vaults
Certified and higher graded
fireproof safes, 33%
Other safes, 67%
Electronic Security
The electronic security market segment
relates to products for monitoring physical
environments, access control and fire alarms.
The segment also covers the installation,
monitoring and maintenance of these systems.
Access control and video surveillance
systems make up 45% of the market, alarms
40%, and other electronic security products
the remaining 15%.
The global market for electronic security
systems is valued at over SEK 410 billion.
EMEA represents around 40%, the largest
markets being the UK, Germany, France, Spain
and Italy. On these markets, Gunnebo has a
Entrance Security
Speed gates, 40%
Turnstiles, 35%
Security doors, 20%
Security gates for airports, 5%
20% 5%
Electronic Security
Access control
and CCTV systems, 45%
Alarms, 40%
Other electronic
security products 15%
15%
11
The Business
OFFERING
Global Security Solutions
for Greater Customer Value
Gunnebo provides security products, services and solutions with a focus
on cash handling, safes & vaults, entrance security and electronic security.
Cash Handling
Gunnebo’s intelligent cash handling solutions are designed to reduce
the time spent on cash management, improve efficiencies in the cash
cycle and make the whole cash handling process more secure. From
entry-level cash deposit systems to self-service cash recycling units
and closed cash handling solutions, the range addresses the needs
of both front and back office environments. Gunnebo also provides
integrated cash management software as well as related services,
such as retail cash monitoring and central hosting.
19%
of Group sales
Entrance Security
Gunnebo’s turnstiles, speed gates and revolving
doors regulate and control the flow of people into
and out of buildings. Intelligent detection and integration with other security systems ensure freedom
of movement for authorised individuals and denial
of passage for people without permission to enter
a given area. Entrance Security also includes ticket
control solutions for mass transit systems and airport
gates for fast boarding, immigration control and
security checks.
12 19%
of Group sales
Safes & Vaults
Protecting valuables is one of Gunnebo’s core businesses. Under leading brands, such as Chubbsafes and Fichet-Bauche, the Group produces high-quality safes and vaults, certified to resist burglary, fire and
explosives. The range includes deposit safes, fireproof filing cabinets,
and safes for the protection of digital media as well as bank vaults
and modular vault rooms. The offering also covers safe deposit lockers
and the automated safe deposit locker system, SafeStore Auto.
25%
of Group sales
Electronic Security
14%
Service
Gunnebo’s solutions for integrated security consist of
several modules for managing
an array of electronic security
functions: access control,
intrusion detection, CCTV
systems, electronic locks and
remote surveillance.
of Group sales
23%
In each product area
Gunnebo offers a range
of security services
encompassing the whole of Group sales
product lifecycle. These
include corrective, preventive and performance maintenance services, as well as
upgrades and retrofitting. Gunnebo also
offers services for the remote monitoring
of customers’ cash handling processes,
alarm systems and surveillance networks.
New for 2014
Thermally insulated security doors
SafeCash Recycler
A self-service cash handling solution
for the deposit and withdrawal of large
volumes of notes and coins.
Certified to resist manual and ballistic
attacks and designed to improve a building’s energy performance in line with
the 2012/27/EU European Directive.
Fichet-Bauche InviKtus
Premium range of safes oﬀering
triple-certified protection against
burglary, fire and explosives.
13
The Business
Regions
Gunnebo’s 33 sales companies are organised into three
regions: EMEA (21 sales companies), Asia-Pacific (8) and
Americas (4). Gunnebo also works with an extensive
Channel Partner network, giving it coverage in markets
where it does not currently have its own sales companies.
Group Sales
Sales by Sub-Region
Region EMEA
Frankrike, 30%
Centraleuropa, 26%
Norden, 13%
Sydeuropa, 12%
Storbritannien/Irland, 9%
Afrika, 4%
Mellanöstern, 4%
Östeuropa, 2%
Europe, Middle East & Africa
Sub-Regions and
Sales Companies
66%
Nordic region: Denmark, Finland, Norway, Sweden
Central Europe: Austria, Belgium, Germany,
Luxembourg, Netherlands, Switzerland
South Europe: Italy, Portugal, Spain
Eastern Europe: Czech Republic, Hungary, Poland
France
UK/Ireland
Middle East: UAE
Africa: South Africa
50%
France, 30%
Central Europe, 26%
Nordic region, 13%
South Europe, 12%
UK/Ireland, 9%
Africa, 4%
Middle East, 4%
Eastern Europe, 2%
Group Sales Sales by Sub-Region
Region Asia-Pacific
Sub-Regions and
Sales Companies
Employees
Employees
Indien, 41%
Sydostasien, 29%
Australien, 15%
Kina, 15%
18%
38%
India
China
Australia and New Zealand
India, 41%
South-East Asia, 29%
Australia, 15%
China, 15%
South-East Asia: Indonesia, Malaysia,
Singapore, South Korea
Group Sales Sales by Sub-Region
Region Americas
Sub-Regions and
Sales Companies
Employees
Nordamerika, 77%
Latinamerika, 23%
16%
12%
North America: Canada, USA
Latin America: Brazil, Mexico
North America, 77%
Latin America, 23%
14 Gunnebo Annual Report 2014
Key Ratios
Customers
Bank Barclays, BNP, Danske Bank, Euronet, Forex, ING, Nordea
MSEK
2014
2013
Order intake
Organic growth, %
Net sales
Organic growth, %
Operating profit/loss*
3,620
–3
3,644
0
109
3,558
–2
3,474
–5
47
Retail Aldi, Auchan, BP, Carrefour, COOP, Decathlon, LIDL, Metro Group, Shell Oil, Spar,
Tokheim, Total
CIT (Cash in Transit) Brinks, G4S, Loomis, Nokas, Prosegur
Public & Commercial Buildings European Commission, Hermès, Honeywell, Siemens
Industrial & High-Risk Sites Besix, Bouygues, Nestlé
Key Ratios
Customers
MSEK
2014
2013
Order intake
Organic growth, %
Net sales
Organic growth, %
987
–5
1,029
8
140
1,043
27
954
20
134
Key Ratios
MSEK
Order intake
Organic growth, %
Net sales
Organic growth, %
Bank Bank of China (China), American Express, Axis Bank, Deutsche Bank, Canara Bank,
Fidelity Investments, HDFC Bank, ICICI Bank, IDBI bank (India), Bank Rakyat Indonesia
(Indonesia)
Mass Transit Hangzhous Metro (China)
Public & Commercial Buildings E2 Power Sdn Bhd, G7 Safety Lockers, Measat Network
roadcasting Systems, Taylor’s University (Malaysia), PT Pos Indonesia (Indonesia),
B
Guardtec, HDS Security, Honeywell, Hyundai Information Technology, KBIT, KT Telecop, S1,
Shinhwa System, Shinsegae Inc., SK InfoSec, TobeAce, CAPS (South Korea), Global Pvt Ltd,
Raghuleela Builders Pvt Ltd, RMZ Eco world, Trafigura & Barclays (India)
Retail Phoenix Mills, Reliance Retail, Tata Croma (India)
Customers
2014
2013
826
–14
884
0
117
913
9
843
7
125
Bank Banco Actinver (Mexico), Banorte (Mexico), BBVA Bancomer
(Canada, Mexico, USA), Banc Sabadell (USA), CIBC (USA and Canada), Citibank (Latin
America), Fifth Third Bank (USA), HSBC (Brazil, Canada, Mexico, USA), ITAU (Brazil), RBC
(Canada and USA), Santander (Mexico, USA), Wells Fargo (USA and Latin America)
Retail Autozone (Brazil and Mexico), C&A (Brazil), Carrefour (Brazil), Cencosud (Brazil), FNAC
(Brazil), McDonald’s (Mexico), Raia Drogasil (Brazil), Riachuelo (Brazil), Súper City (Mexico),
Telus (Canada), TIM (Brazil), Wow Mobile (Canada), Target (Canada), The Body Shop (Canada),
Walmart (Brazil)
Other NCR (Canada), Shell Oil (Canada), Weatherford Global (Canada)
15
The Business
Region Europe,
Middle East & Africa
In 2014, Gunnebo’s sales on its Western European markets
stabilised after several years of negative development. In
tandem with this, the region has continued to focus on
EMEA
Own sales companies
and Channel Partners
reducing fixed costs, primarily in Europe. The business in
Middle East and Eastern Europe showed healthy growth,
whereas the development in Africa was flat. For the full year,
the organic growth in sales was unchanged and the operating
margin was 3.0% (1.4%).
Channel Partners only
Stabilised Sales and Improved Proﬁtability
THE REGION IN BRIEF
Europe, Middle East & Africa (EMEA) is the
Group’s largest region, accounting for 66%
(66%) of Group sales in 2014. The region is
made up of 21 sales companies offering solutions and services in the product segments
cash handling, safes & vaults, entrance security and electronic security. The most important customer segments are bank, retail, CIT
companies, mass transit, public & commercial
buildings, and industrial & high-risk sites.
In all five Western European sub-regions
– Nordic, UK & Ireland, Central Europe,
France and Southern Europe – the markets
are mature. Here Gunnebo is focusing on
developing from being a product supplier to
a solutions provider, by actively working with
national and international key customers.
The markets in the three sub-regions
Eastern Europe, Middle East and Africa are
growth markets. Here the focus is to extend
Gunnebo’s footprint into markets where
there is growth potential, and to launch new
segments of the Group’s product portfolio.
Sales go primarily through a network of
16
carefully selected Channel Partners, but also
through project sales in association with
international systems integrators.
CUSTOMERS ANd MARKET
Gunnebo has a long history in the region
where the Group has been building relationships with key customers for over 100 years
through the strong brands of Fichet-Bauche
and Chubbsafes.
The basis of the Group’s business is still
in the bank sector. There is a trend towards
less and less business with this sector, but
this customer segment is developing well
in France, the Middle East as well as in SubSaharan Africa with central banks. Historically
speaking, Gunnebo’s business with bank customers has related to the sale of safes, vaults,
vault doors and electronic security solutions.
The Group’s cash handling offering emerged
from working with major bank customers in
the region.
In recent years the trend has shifted,
whereby flows of cash in society are increasingly being managed outside the bank sector,
primarily by CIT companies and the retail
sector. Gunnebo has therefore refined its
offering to enable it to streamline and assure
security in the whole cash handling process,
with a particular focus on retail. This is a
growing business in the region. For example,
the Group’s closed system for cash handling,
SafePay, reported its best result ever in 2014.
Sales were generated predominantly in the
Nordics and Italy.
Other important customer segments in the
region are mass transit, public & commercial
building, and industrial & high-risk sites. The
proportion of sales to these customer segments is relatively stable. Development is
closely linked to public investments in infrastructure. Here, the main offering is within
electronic and entrance security. During the
year, sales to these customer segments were
boosted with the market introduction of the
new series of entrance control gates. The
strongest development in these customer
segments during the year was noted on the UK
and Middle East markets.
+62
During the year we continued to trim
our fixed cost base. Meanwhile sales
have stabilised, and we can report an
operating margin of 3.0%, a clear
improvement on 2013 and a major
step in the right direction.
Improved operating profit
MSEK
DEVELOPMENT OF THE BUSINESS
For Gunnebo, business development is
closely connected to the strategy of shifting
the Group’s point of gravity with relation to
geographic focus, allocation of resources and
increased customer value. Geographically, the
Group is moving its point of gravity to markets
with continued growth in its core business. In
2014, Gunnebo opened representative offices
in Oman, Saudi Arabia, Nigeria and Turkey.
When it comes to resource allocation,
Gunnebo has continued to reduce its fixed
cost base in the region, which has contributed
to the year’s results.
In June, Gunnebo divested Fichet-Bauche
Télésurveillance to Butler Group. The divestment was in line with the strategy to phase
out those areas which are not part of the
Group’s defined core business or where the
Group does not see the opportunity to attain
a significant market position.
To increase customer value, the Group also
expanded its business offering on the UK/
Ireland market through the acquisition of
electronic security solutions provider Clear
Image. The acquisition brings new opportunities and a broader service offering for existing
customers in the bank, CIT and retail sectors.
During the year, the Group also launched
a number of new products in the region. For
instance the introduction of a new range of
speed gates within entrance security, the
SpeedStile series, was very well received
by the market. In addition, a new range
of thermally insulated security doors was
launched which meet standards set by the
new European Directive on a building’s energy
performance.
Within cash handling, a new cash deposit
solution, SafeCash Counter Deposit Smart, and
SafeCash Recycler, a solution for the deposit
and withdrawal of large volumes of notes and
coins in the back office, were also well received.
Furthermore, the Group launched a new solution for the integration of SafePay into the customer’s POS system, SafePay QuickPOS, which
has been developed in close cooperation with
a number of key customers.
RESULTS FOR 2014
Order intake in Region EMEA amounted to
MSEK 3,620 (3,558). Organically, i.e. excluding acquisitions, divestments and currency
effects, order intake fell by 3%. The decline
was primarily attributable to the Nordics and
Central Europe, with tentative demand in
bank and retail. In the Middle East, France and
Eastern Europe, order intake rose organically
compared to 2013.
Net sales increased to MSEK 3,644 (3,474),
but organically they remained unchanged on
entral
2013. Sales increased in the UK/Ireland, C
Europe and the Middle East, while other markets developed less strongly than in 2013.
Operating profit excluding non-recurring
items amounted to MSEK 109 (47) and the
operating margin to 3.0% (1.4%). Efforts to
reduce the cost base in Europe made a positive contribution to the improved operating
margin.
Items of a non-recurring nature totalled
MSEK –1 (–74), partly including the positive
effect on results of MSEK 73 from the divestment of French subsidiary Fichet-Bauche
Télésurveillance, and partly one-off costs of
MSEK –74 (–74) primarily attributable to staff
cuts and other structural measures.
Q1
Q2
Q3
Q4
Full
year
Full
year
MSEK
2014
2014
2014
2014
2014
2013
Order intake
1,070
908
838
804
3,620
3,558
1
−3
5
−15
−3
842
925
864
1,013
3,644
7
0
0
−4
0
Organic growth, %
Net sales
Organic growth, %
SVP, Morten Andreasen
3,474
Operating profit/loss excl. non-recurring items
−1
30
23
57
109
47
Operating margin excl. non-recurring items, %
−0.1
3.2
2.7
5.6
3.0
1.4
Non-recurring items
−19
51
−4
−29
−1
–74
Operating profit
−20
81
19
28
108
–27
17
| kundcase
The Business
region emea
MARKet trends
The factors driving the development of the security market in Western Europe are typical of those
for other industrialised markets around the world,
namely economic growth, a higher standard of living,
and urbanisation. The annual growth forecast for the
section of the market where Gunnebo has a presence
is 2–3%.
In Eastern Europe, demand in the security market
has been bolstered by greater spending on construction in much of the region.
Major changes in the economic systems of Eastern
Europe, and the accompanying increase in wealth, is
widening the base of both businesses and individuals
who require and have the means to invest in security
solutions. The annual growth forecast for the section
of the market where Gunnebo has a presence is 3–5%.
The sale of security equipment in Africa is mainly
supported by increased urbanisation, economic
growth and greater personal affluence. In conjunction
with this growth in wealth, there are more assets to
protect. The annual growth forecast for the section of
the market where Gunnebo has a presence is 10–15%.
In the Middle East too, market development is
driven by economic growth and greater affluence.
There is also a clear trend towards higher demand
for better protection of commercial and public buildings through the installation of entrance and access
control systems. The annual growth forecast for the
section of the market where Gunnebo has a presence
is 4–7%.
Orange Makes
Security Simpler
When telecom operator, Orange, decided to upgrade its access
control system – starting with its new French headquarters –
it was looking for a partner to help integrate the new Desfire
encryption technology into its employee smart card. Staff use
a single card for multiple functions – as a means of identification when accessing different parts of the building, for logging
safely onto the IT system, and in time as a method of payment
for use at on-site areas such as the staff canteen. Gunnebo,
a long-time provider of access control solutions to Orange,
equipped the new headquarters with the latest generation of
cards and card readers with encryption technology securing
the transfer of data from card to reader, from reader to local
processing unit (LPU) and from LPU to the servers.
Delivers intelligent access control
Since the smart card is compatible with any existing access
control reader, it can be used by Orange employees at any
building within the Group. The integrated system set up by
Gunnebo has now become a standard for Orange which the
telecoms corporation plans to deploy not only in its other
offices in France, but also at its many sites around the globe.
“This vision and solution, driven by Orange Security Direction with the help of Gunnebo, serves both to raise the level
of building security and make the lives of Orange’s employees
much simpler,” explains Denis Mangin, from Orange Security
Direction.
About Orange
Orange is one of the world’s leading telecom operators. The Orange
Group serves 240 million customers
in 30 countries and has a turnover of
more than €40 billion (2013).
region emea
Building Britain’s Largest
Strongroom
Since the storage of pharmaceuticals is heavily regulated, UDG must
ensure that its facilities conform to the British Home Office’s M
edicine
Licensing Laws and MRHA Regulations. In recent years the British
Government has been increasing the number of medicines on their
high-security list. This has led to more demand from the pharmaceutical sector for storage space which meets the national regulatory
requirements.
UDG found itself in a situation where it had outgrown its existing
strongroom storage facility and needed to expand quickly to respond
to the growing market demand by creating 1,500 additional pallet
spaces at their new purpose built warehouse.
Solution that meets business-specific needs
UDG turned to Gunnebo as a supplier approved by the British
Government for the delivery and installation of strongrooms in the UK.
Using modular vault panelling, Gunnebo manufactured and constructed it’s biggest ever strongroom. All Gunnebo vault panels are
independently certified for resistance against manual attack, to conform to levels of security required.
Now complete, the strongroom measures 11 metres high, 16.7
metres wide and 46 metres long. Installation was carried out within
eight weeks – one week ahead of schedule.
UDG’s latest strong room has been designed and constructed
to achieve 1500 extra pallet storage spaces to conform to British
Government regulations for storage of pharmaceuticals The new
strongroom was completed without any disruption to UDG’s business.
“We are absolutely delighted. This project was built on budget, ran
like clockwork and was even completed ahead of time,” says Mark
Langton, Director of Operations at UDG. “We have built up an excellent
relationship with Gunnebo which has strengthened with every project
completed. It was a natural conclusion to award this latest contract to a
supplier in whom we place such great trust” That trust is also shared by
the British Government who recognise the quality of Gunnebo products.
| customer case
Security Advisor
for Central Bank
When the Central Bank of Oman was building its new
disaster recovery centre, it wanted a vault that would make
it the most secure premises in the Middle East. The building needed to be secure not only because it would host all
the data belonging to the central bank, but also because it
would serve as a safe haven for the bank’s senior management in the event of a disaster.
Found complete business partner
“We first got to know Gunnebo through its reputation as
the best supplier of vaults in the world,” says Jamal AlRaisi, Senior Manager Information Security and Corporate
Security at the Central Bank of Oman. “Following the introductory discussions, we realised this was the partner we
were looking for to make sure that our disaster recovery
centre would meet the highest security standards in the
region. This was our aim, and this is also what we, together
with Gunnebo, achieved.”
Gunnebo gave the customer expert advice on security,
and was also responsible for project management for
construction and installation in the centre. As a result, the
Central Bank of Oman has now appointed Gunnebo as its
security advisor to consult on all matters related to security.
About Oman
Oman is on the south-east coast of the Arabian Peninsula.
Its capital is Muscat, where a large proportion of the
sultanate’s four million inhabitants reside. As with many
other countries in the region, oil is by far the main commodity, constituting over 95% of the nation’s exports.
About UDG
UDG (UniDrug Distribution Group) provides supply chain solutions
to the healthcare industry, offering specialist storage, fulfilment
and distribution services to pharmaceutical, healthcare, veterinary
and consumer product manufacturing companies in the UK.
Gunnebo Annual
Årsredovisning
Report 2014
2014
19
The Business
Region Asia-Pacific
In Asia-Pacific, the Group’s good growth in recent years has
continued in 2014, if at a lower rate. However, the rate of
growth decreased on many markets in the region, partly due
to national elections which affected the business climate.
For the full year, the organic growth in sales was 8% and the
operating margin was 13.6% (14.0%).
Asia-Pacific
O
wn sales companies
Continued Growth and Geographical Expansion
THE REGION IN BRIEF
Asia-Pacific is the Group’s second largest and
fastest-growing region, accounting for 18%
(18%) of Group sales.
The region has eight sales companies, as
well as representative offices and a presence
through strategic partnerships on many other
markets.
The offering in the region comprises
products and services within the safes and
vaults, entrance security, electronic security,
fire safety, and cash handling segments.
The most important customer segments
are bank, retail, mass transit, public &
commercial buildings, and industrial &
high-risk sites.
Most markets in the region are growth markets where the focus is to extend Gunnebo’s
footprint by expanding in those countries
where the company already has a presence
and by launching the Group’s offering through
business partners in those territories where it
is not currently represented. Sales via Channel
Partners and other strategic business partners
is an important element in securing national
coverage on each market. On certain large
markets like India and Indonesia, there is also a
well-developed business for project sales and
major installations.
CUSTOMERS AND MARKET
On many markets in the region, the Group
has been building relationships with key
customers, primarily in the banking sector, for
20 over 80 years through the strong C
hubbsafes
brand. In India the brands Steelage (safes) and
Minimax (fire safety) are also very important,
while in Australia the cash handling system,
IntelliSafe, has a strong market position in the
retail and casino segments.
The bank sector forms the foundation for
the Group’s business in Asia-Pacific. The core
business centres on safes and vaults, with
a growing interest in entrance security and
electronic security solutions. The strongest
development in order intake during the year
has been from the Chinese market.
One part of the business that has excellent
growth potential in the region is cash handling. The Australian market is mature – cash
handling has been part of Gunnebo’s core business for many years, with a large proportion
of installations and a well-developed service
organisation in place.
On most of the other markets in the region,
cash handling is generally considered to equate
to the physical transportation of money from
one place to another.
Gunnebo is therefore focusing on increasing
awareness of costs and potential risks connected with cash handling.
At the same time the Group is launching
solutions that make cash handling safer and
more efficient, an offering which targets all
players in the process such as retail, casinos
and the mass transit network. Great progress
was made launching this concept in Indonesia
and Malaysia during 2014, exemplified by the
order received from Indonesian taxi operator,
Express Group.
Read more about customer cases
from the region on page 22
Another important customer segment in
the region is mass transit, where Gunnebo
has a strong position as a supplier of entrance
security. Business in this segment is closely
linked to investment in infrastructure, which
is a high priority on several markets in the
region, including China for instance. In 2014,
China showed the highest growth rate in the
segment.
In recent years the region has seen a rise in
security awareness from the public & commercial buildings and industrial & high-risk
sites segments where Gunnebo’s main offering is in entrance security, and safes and
vaults. Order intake in the region improved in
2014 with the launch of the new SpeedStiles
range, which was particularly well received
in South Korea and Australia. On the Indian
and Indonesian markets, fire safety products
are also an important feature of Gunnebo’s
offering.
For Gunnebo, business development in the
region is closely connected to the long-term
strategy of shifting the Group’s point of
gravity regarding geographic focus, allocation
of resources, and increased customer value.
Geographically, Gunnebo has continued to
13.6
Thanks to good cost control, the region
has delivered a strong operating profit,
even though the business climate on
many markets in the region has been
weaker than expected. We have continued
to invest in growth opportunities and
now have a very stable platform for
SVP, Sacha de La Noë
continued growth and expansion.
Took up position on January 1, 2015
Operating margin
%
strengthen its presence in South-East Asia in
2014 and has opened up a new representative office in Myanmar.
The Group is investing in Asia-Pacific
more heavily than any other region. In 2014
Gunnebo continued to invest in its production plants in India, Indonesia and China, and
has also worked on strengthening the region’s
sales companies.
To increase customer value, the market
introduction of new offerings in secure, efficient cash handling has continued successfully. In close collaboration with a number of
key customers, the Group has also invested in
the establishment of a centre for monitoring
customer facilities in India.
Various entrance security products have
also been launched such as the new SpeedStiles series, as well as a new range of lowerclassification safes primarily intended for
private customers, and a fire safety offering
for the hotel, restaurant and catering sector.
items amounted to MSEK 140 (134), which
equates to an operating margin of 13.6%
(14.0%).
Non-recurring items totalled MSEK –9 (–8).
MARKET TRENDS
Growth on the security market in Region
Asia-Pacific has increased more quickly than
the global average over the past two decades.
China is one of the world’s largest security
markets and also one of the fastest growing.
The Chinese government is investing large
sums in infrastructure projects and public
security programmes, and urbanisation is
also increasing, making airports and mass
transit networks the focus for large-scale
installations of security equipment, such as
electronic security and entrance security.
In India the market is also expanding,
driven by economic growth, increased construction and rising personal affluence, coupled with a growing population. The Indian
state’s aim to increase accessibility to banks
and ATMs for the country’s rural population
is driving demand for vaults and ATM safes.
The market remains less developed than that
in Western Europe, and offers considerable
opportunities for security providers, particularly in the energy and transportation sectors
where considerable investment is being made
to improve infrastructure.
South Korea is currently the continent’s
fourth largest security market. Whilst the
market is not growing at the rate of China
and India, it is expected to increase over the
coming years, supported by rising investment
in commercial building construction and a
soaring urban population.
The annual growth forecast for the section
of the market where Gunnebo has a presence
is 6–8%.
RESULTS FOR 2014
Order intake in Region Asia-Pacific amounted
to MSEK 987 (1,043). Organically, i.e. excluding acquisitions, divestments and currency
effects, order intake fell by 5%. The decline
was attributable to weaker demand in India,
Australia and South-East Asia. China reported
strong order intake during the year, a rise of
16% on 2013.
Net sales increased to MSEK 1,029 (954).
Organically this equates to a rise of 8%, primarily attributable to strong sales in China
and India. The majority of other countries in
the region made a positive contribution to
the higher sales.
Region Asia-Pacific
MSEK
Order intake
Organic growth, %
Net sales
Organic growth, %
Q1
Q2
Q3
Q4
Full
year
Full
year
2014
2014
2014
2014
2014
2013
258
232
272
225
987
1,043
12
−8
1
−25
−5
221
281
228
299
1,029
15
24
−11
5
8
954
24
42
27
47
140
134
10.9
14.9
11.8
15.7
13.6
14.0
Non-recurring items
−1
−5
0
−3
−9
–8
Operating profit
23
37
27
44
131
126
21
| customer case
The Business
region asia-pacific
Driving the Cash Handling Revolution
Gunnebo received its first cash handling order in Indonesia in
2014, when taxi operator Express Group decided to install 50
IntelliSafe units at 25 of its taxi pools in Jakarta, Bogor, Tangerang
and Bekasi.
“At Express Group we always implement the latest technology
in order to improve our performance and efficiency,” says Daniel
Podiman, President Director of Express Group. “One of our goals is
to improve security and accuracy, and to simplify the management
of our drivers’ daily fares, so we are proud to be the first users of
IntelliSafe in Indonesia.”
Streamlines business processes
Since IntelliSafe was installed, cash handling at Express Group has
Minimising Fare Evasion
Korean company Airport Express (AREX) was experiencing
problems with passengers passing onto their trains without
a ticket and needed a solution which would ensure that all
passengers had paid their fare before boarding the train. With
170,000 passengers during rush hour every day, the company
required a ticket gate which would not only prevent fare
evasion but also allow the smooth flow of passengers, and
increase safety and security for its customers.
Chooses the industry pioneer
“We turned to Gunnebo Korea since they have a good track record of providing high-quality and durable solutions,” explains
Seo Jung-hoon, Head of Security at AREX. “Gunnebo suggested
we install speed gates, and we now have almost 200 Gunnebo
SpeedStiles in place at all 11 stations on the line. This solution
has more or less eliminated fare dodgers, and our story has
become a good example for the industry.”
AREX followed Gunnebo’s recommendation and has installed the full-panel model of SpeedStile with a 1,400mm
glass wing.
About AREX
AREX operates the express train line between Incheon
International Airport and central Seoul. It is an important
part of the city’s infrastructure as it offers rapid connections
for air passengers and commuters alike.
22 become much more efficient. Cash collection via the company’s
CIT partner has also been streamlined as collections are now only
made when IntelliSafe indicates there is a need, rather than at
regular planned intervals as before.
Gunnebo began launching products from its cash management
range on the Indonesian market in 2013, and the area is continuing
to expand.
About Express Group
Express Group is one of the largest taxi companies in
Indonesia, with more than 10,000 licensed vehicles and over
24,000 qualified drivers.
Access Control Crucial for
High-Risk Site in China
Tianwan Nuclear Power Plant required a solution for comprehensive control and monitoring of the movement of
individuals in and around its site. Each employee needed to
be assigned specific access rights to give them authorisation to the relevant areas of the plant and the entrance
gates themselves would have to withstand years of wear
and tear, not just from staff use but also from the humid,
salty sea air.
Optimised entrance security secures flow
A combination of exterior full-height turnstiles and interior
tripod turnstiles requiring personal identification for entry
was installed by Gunnebo. The solution controls the flow
of people and provides full security for the high-risk site by
preventing unauthorised access.
The entrance security solution from Gunnebo has
improved security management at the Tianwan Nuclear
Power Plant. In addition, the units have a long operating life
and the surface material can withstand the harmful effects
of the salty air, providing a high degree of reliability.
About Tianwan
Tianwan Nuclear Power Plant is the largest joint engineering project undertaken by China and Russia. Located
on the east coast of China, it has been operational since
2006 and is part of the Chinese government’s nuclear
power development programme.
Region Americas
The region showed a decrease in order intake during the
year, due to weaker demand in the retail sector in Brazil
and restructuring in public administration in the USA.
Thanks to good cost control, the region was able to keep its
operating margin well above the Group average. Gunnebo
also continued to increase its footprint in Latin America with
the acquisition of Dissamex, a Mexican provider of electronic
security services. For the full year, sales developed on a par
with last year and the operating margin was 13.2% (14.8%).
Americas
wn sales companies
O
Retained Position on a Recovering Market
THE REGION IN BRIEF
In Region Americas, Gunnebo is organised
into four sales companies: Canada, USA,
Mexico and Brazil. The region accounts for
16% of the Group’s sales, and despite sluggish
development in 2014 many of the region’s
markets are growth markets in the security
sector.
The most important customers in the region are in the bank, retail, mass transit, and
public and commercial properties segments.
North America is considered a mature market.
The Group can see potential in launching cash
handling offerings from its global portfolio
which are not yet represented in this part of
the region, and this is a platform for future
growth. To secure national coverage in the
USA, the majority of sales take place through
an extensive network of Channel Partners. In
addition there is a well-established concept
for key customers with a number of major
national customers in the bank sector. In
Canada, business is primarily conducted
through Gunnebo’s own regional sales and
service organisation.
The markets in Latin America are growth
markets, and the focus here is on extending Gunnebo’s geographical footprint and
introducing parts of the Group’s offering that
are not currently an established part of the
business. Cash handling is an important foundation for future growth opportunities here.
Sales take place directly to end customers in
Brazil and Mexico, but through a well-established network of Channel Partners on other
markets in the region.
CUSTOMERS AND MARKET
Gunnebo has a long history in the region
where the company has been doing business
in Canada for over 60 years with the strong
Chubbsafes brand and in the USA for more
than 40 years under the Hamilton Safe brand
in the bank and public administration sector. In Brazil the Gateway brand has been
established since the mid-1990s, and is today
associated with high quality and customised
solutions in theft protection (primarily electronic article surveillance systems and CCTV)
for the retail sector.
For historical reasons, there is still some
variation in the Group’s presence in each
country in the region. In Canada, the bank
sector forms the basis of the Group’s business. Gunnebo’s offering includes a very welldeveloped service portfolio which accounts
for the majority of sales, but there are also
products and solutions in safes, vaults, and
lock systems for bank and retail customers.
Other important segments in Canada are
public & commercial buildings, and airports,
where the core offering is in entrance security
and related services.
The core business in the USA is in the
bank sector. Business consists primarily of
customised solutions in safes and vaults, but
also solutions for the efficient transfer and
deposit of bank-related services such as daily
takings, documents and cheques, as well as
high-security windows and entrance security
solutions.
The core business for Gunnebo Brazil is to
offer products and services in theft protection, monitoring and article surveillance for
the retail sector. In 2013 Gunnebo began
introducing cash handling on the Brazilian
market, and in 2014 several orders were
received from retail and CIT companies.
In Latin America, the Group established
a sales company in Mexico in 2013, which
focuses on providing security-related services for international banks represented
in the country. In 2014 the Group acquired
Dissamex, a provider of electronic security
services, and doubled Gunnebo Mexico’s
sales. The Group now has a solid platform for
providing security-related services across the
nation.
Through partnerships, Gunnebo also
conducts sales on several other markets in
23
The Business
13.2
During the year we have had good
control of pricing and costs in a very
competitive market climate. This has
contributed to continued good profitability. Moreover, the introduction of
new products has helped us advance
our market positions.
Operating margin
%
Latin America. In Colombia the Group’s core
business lies in entrance solutions for the
mass transit sector, and in both Argentina
and the Caribbean, the Group received several important orders for safes and vaults,
as well as its first order in the region for the
automated safety deposit locker solution,
SafeStore Auto.
For Gunnebo, business development in the
region is closely connected to the strategy
of shifting the Group’s point of gravity with
regard to geographic focus, allocation of
resources and increased customer value.
During 2014 Gunnebo has continued to
strengthen its presence in Latin America with
the acquisition of Mexican company Dissamex,
and this is also in line with the Group’s ambition to move up the value chain.
In North America, Gunnebo has been successfully focusing on broadening its customer
base during the year, and this has compensated for weaker demand from governmental
customers.
A number of strategic partnerships were
entered into during 2014, to reinforce the
company’s offering and achieve greater market coverage. Gunnebo has also continued
to invest in developing its cash handling
offering in the region. The investments focus
mainly on the market adaptations required
to enable global solutions to be customised
to local needs. Gunnebo has also successfully
launched its automated safety deposit locker
solution, SafeStore Auto, in the region. Moreover, investments have been made to improve
production efficiency at the Hamilton production plant in the USA.
RESULTS FOR 2014
Order intake in Region Americas amounted
to MSEK 826 (913). Organically, i.e. excluding
acquisitions, divestments and currency effects, order intake fell by 14%.
The decline was mainly attributable to
weaker demand in the Brazilian retail sector, budget cuts in US public administration and a strong comparison year, a major
order from BBVA Bancomer having been
Region Americas
MSEK
Q2
Q3
Q4
Full
year
Full
year
2014
2014
2014
2014
2014
2013
Order intake
178
190
221
237
826
913
Organic growth, %
−16
−31
−12
18
−14
Net sales
187
213
222
262
884
7
9
−14
2
0
Organic growth, %
843
15
26
32
44
117
125
8.0
12.2
14.4
16.8
13.2
14.8
0
−3
−1
0
−4
–2
15
23
31
44
113
123
Non-recurring items
Operating profit
24 Q1
SVP, Tomas Wängberg
received in Mexico during the second quarter of 2013.
Net sales increased to MSEK 884 (843),
but organically they were unchanged compared to the previous year. The acquisition
of Dissamex in Mexico contributed to the
region’s sales during the fourth quarter.
items amounted to MSEK 117 (125), which
equates to an operating margin of 13.2%
(14.8%). Costs for market initiatives aimed at
broadening the Group’s customer offering in
the region burdened the profit and margin
during the year. Expenses of a non-recurring
nature amounted to MSEK –4 (–2), primarily
relating to acquisition costs.
MARKET TRENDS
Demand for security systems in North
America is expected to rise as the major
banks start to recover from the economic
slowdown and the resulting consolidation of
the bank market. One trend is that the national banks are overhauling and reducing their
branch network by merging branches. This in
turn is driving higher investment as new local
and regional branches are established. The
new branches are often designed with comprehensive technological solutions and less
hardware. The annual growth forecast for the
market available to Gunnebo is 4–6%.
In Latin America, development on the security market is primarily driven by a heightened
security consciousness and continued investments by multinational and regional companies setting up in the region. The annual
growth forecast for the market available to
Gunnebo is 5–7%.
region americas
| customer case
Acquisition Adds Value
In August 2014, Gunnebo acquired Mexican electronic security service provider Dissamex. The company has a solid customer base including leading Mexican and international banks
as well as other financial institutions. One of them is Banco
Santander – ranked as the tenth safest bank in the world*.
“We have had a partnership with
Dissamex encompassing security maintenance of our buildings, provision of
security equipment and their infrastructure and installation, for the past seven
years,” says Carlos Jaime, B.A., Director of
Local Security, Mexico for the Financial
Group Santander.
“The aim for perfection within the services offered and
those required by us have made Dissamex a strategic supplier
for the Santander Group. Furthermore, Dissamex have helped
us achieve economies of scale, and are a reliable supplier with
a high adaptability to the changing needs of the Group.”
With Gunnebo acquiring Dissamex, Carlos Jaime and Banco
Santander see opportunities for increased added value.
“We expect this not only to strengthen our existing relationship and to support us in generating value in order to
be more competitive, but also to transfer this benefit to our
customers and shareholders.”
Pioneering Bank
Innovation in the US
In 2014, American bank, SunTrust, unveiled the latest in
banking technology at its flagship Plaza Garden branch in
downtown Atlanta.
One of the new features was Gunnebo’s SafeStore
Auto – a fully automated safe deposit locker system that
allows clients to access their valuables using their debit
card, pin number and hand scan. The system was delivered
by Hamilton Safe and became the first of its kind to be
installed in the USA.
SunTrust has modelled the branch to become a testing
ground for new concepts that could make their way into
other locations.
About Santander Mexico
About SunTrust Banks Inc.
Santander is the largest financial group in Spain and
Latin America with over 100 million customers. It is today
Mexico’s third largest bank with 1,268 branches and over
5,500 ATMs.
SunTrust Banks, Inc., headquartered in Atlanta, is one
of the USA’s largest banking organisations, serving a
broad range of consumer, commercial, corporate and
institutional clients. Through its flagship subsidiary,
SunTrust Bank, the company operates an extensive
branch and ATM network throughout the high-growth
South-East and Mid-Atlantic states.
*Banco Santander was ranked tenth in Global Finance Magazine’s
listing of the world’s 50 safest banks. The list reflects the global
stability of banks.
Orchestrating a Large-Scale Installation
In 2013, Brazilian pharmaceuticals retailer, Brasil Pharma, concluded
a deal to equip over 450 of its shops with surveillance equipment.
Installation was carried out by Gunnebo’s service technicians in
Brazil over an eight-month period. By the end Brasil Pharma stores
in a total of 119 cities had been fitted with Gateway electronic
article surveillance systems and CCTV cameras.
The project demanded expert coordination and alignment
with the retailer to ensure that every element was installed on
time and with minimal disruption to Brasil Pharma’s business’s
operations.
About Brasil Pharma
Brasil Brasil Pharma owns the largest network of drugstores
in Brazil which it operates under the brands Big Ben, Drogaria
Rosário, Sant’Ana, Mais Econômica and Farmais.
25
OPERATIONS
Global Manufacturing Close to the Customer
At the end of 2014, the Gunnebo
Group had 12 manufacturing units
( ) in 10 countries worldwide.
In recent years the point of gravity of the
Group’s manufacturing footprint has gradually shifted towards growth markets. These
include China, where the Kunshan factory
was opened in 2011, and India, where the
Halol plant has expanded significantly to
accommodate larger production volumes.
The shift means a larger proportion of the
Group’s production is increasing in areas
where its customer base is growing, allowing
Gunnebo to more effectively serve market
demand.
Americas
Proportion of employees: 7%
1. Cincinnati
1
Number of employees: 155
Manufactures: Safes & vaults, entrance
security, airtube systems.
Global Standards
Gunnebo’s manufacturing units undergo regular independent audits
to meet the requirements set by global standards. 90% of the manufacturing units have ISO 9001 certification, 90% have ISO 14001 certification and 40% have OHSAS 18001 certification. Gunnebo’s goal is
to introduce ISO 9001, 14001 and OHSAS 18001 at all manufacturing
units by the end of 2016.
ISO 9001 An international standard for quality management systems.
It provides assurance that products can be consistently produced to the
required standard of quality.
ISO 14001
An international standard for environmental management
systems. It provides assurance that environmental impact is being measured and improved.
OHSAS 18001 A series of standards that can form the basis of
a health and safety management system. These standards provide
assurances that an organisation is managing occupational health and
safety risks.
EMEA
Proportion of employees: 34%
1. Baldenheim
Manufactures: Entrance security,
electronic security
ISO 14001, ISO 9001, OHSAS 18001
(planned 2015)
2. Bazancourt
Manufactures: Safes & vaults
ISO 14001, ISO 9001, OHSAS 18001
3. Doetinchem
Manufactures: ATM safes
ISO 14001, ISO 9001, OHSAS 18001
7
3
7. Uckfield
4. Lavis
Manufactures: Entrance security
ISO 14001, ISO 9001
5. Markersdorf
Manufactures: Safes & vaults
ISO 14001, ISO 9001, OHSAS 18001
6. Trier
Manufactures: Cash handling
ISO 14001, ISO 9001, OHSAS 18001
Manufactures: Entrance security
ISO 14001, ISO 9001
During 2014, Gunnebo reported
the closure of the Uckfield plant
and the transfer of production to
Kunshan in China.
8. Wadeville
Manufactures: Safes & vaults,
entrance security
ISO 14001 (planned 2015), ISO
9001, OHSAS 18001 (planned
2015)
5
6
2
1
4
3
1
2
Asia-Pacific
Proportion of
employees: 59%
8
1. Halol
Manufactures: Safes & vaults,
ATM safes
ISO 14001, ISO 9001
Gunnebo Annual Report 2014 2. Jakarta
Manufactures: Safes
ISO 14001, ISO 9001,
OHSAS 18001
3. Kunshan
Manufactures: Cash handling,
entrance security
ISO 14001, ISO 9001
27
OPERATIONS
Increased Profitability through
Continuous Improvements
Operations is responsible for
Gunnebo’s manufacturing units, purchasing, logistics, technical support
for the Group’s sales companies, and
research and development (R&D).
Operational Excellence
Gunnebo’s focus on results and performance
is the foundation on which the Group builds
its business. Within Operations this means
driving continuous improvements within
manufacturing and logistics to make all
related processes more efficient and more
effective.
In 2013, the Gunnebo Operations System
(GOS) was introduced to provide a standardised production system to ensure the improvement to production efficiency organised
around quality, delivery, use of resources,
health & safety and securing employee commitment. During 2014, all plants completed
an audit to assess their status with regard to
these areas. In addition, implementation of
GOS continued apace, with dedicated teams
in place in many factories charged with
integrating the GOS methodology into the
manufacturing culture. A plan has also been
established for the continued roll-out of GOS
in 2015 and beyond.
Thanks to focused work with GOS, the
quality and punctuality of deliveries have
improved during the year. Compared to 2013
the number of complaints about quality has
decreased by 36% and punctual deliveries
have increased from 90% to 91%.
Strategy
Quality Reporting System
Operations supports Gunnebo’s long-term
strategy which is based on shifting the point
of gravity of the Group’s business to markets
with good conditions for growth.
The Halol plant in India, for example, has
been expanded in recent years. Productivity
has surged and the plant has achieved greater
efficiency through work with GOS. The value
of products manufactured at the plant has
increased by 115% since 2011. To meet the
local demand for ATM safes, capacity at
Halol was increased in 2013. As a result the
plant now produces around 30% of all of the
Group’s ATM Safes. In 2014 investment plans
for further expansion were approved to support growth in the region.
Gunnebo’s NCN system measures the quality
performance of all units. All customer complaints are logged in the system to provide
an overall picture of quality from production,
installation and after-sales service. During 2014,
the NCN system was upgraded to make it more
transparent and efficient. The data in the NCN
system has been aligned with GOS and measures whether Gunnebo is achieving a satisfactory enough level of quality across the Group.
Quality
Over 90% of Gunnebo’s plants are certified
to ISO 9001, and the goal is to introduce
the standard at all units by the end of 2016.
Continuous quality improvement is a cornerstone of GOS and the aim is to bring deviations from quality down to almost zero at all
plants, and to drive value for the customer by
delivering the right products first time and
on time.
To define the minimum level of quality
required for safes, both manufactured and
sourced, Gunnebo introduced a common
quality platform during 2014. The platform
has also established a common inspection
procedure which all finished products must
undergo before they can be approved to ensure consistency of quality across all plants.
Supplier Award
During the year, Gunnebo’s delivery
precision was acknowledged by one of
its major customers, NCR, through a
supplier award for Delivery and Supply
Chain Reliability. NCR is the leading global
manufacturer of ATMs and Gunnebo
supplies it with ATM safes from its plants
in D
oetinchem and Halol.
28 “The winners of our supplier awards
continue to demonstrate leadership and
innovation in areas that are crucial to
keeping our business moving forward,”
says Bob Ciminera, SVP of Integrated
Supply Chain at NCR. “They bring unique
ideas that raise the bar and redefine the
value of the partnership.”
Product Development
Together with the Group’s global product
managers, Operations introduced an integrated Product Lifecycle Management (PLM)
process during 2014, a substantial part of
which focuses on research and the development of new products.
The Group launched new products onto
multiple markets and into several different
segments during the year.
Read more under Offering on pages 12–13.
In addition to these, several new ATM safes
were developed at Gunnebo’s plant in Doetinchem and underwent successful testing
against explosives.
Logistics
A restructuring of the supply chain in Europe
was carried out during 2014 and a new supply chain model is being implemented. This
means for example that the management
of the European central warehouse has
been outsourced to a logistics supplier and
Gunnebo can focus on central order management, operational purchasing and improving
supply chain efficiency. The new warehousing
solution gives Gunnebo greater storage and
distribution flexibility, putting the Group in
a position to more effectively meet the demands of European customers.
Sourcing and Procurement
Gunnebo has a central function which coordinates purchasing for a number of global
categories: steel, sheet steel, indirect materials, transport, electronics, locks, circuit boards
and safes. The central purchasing function
allows the Group to negotiate better overall
terms in these categories and serves to keep
the total number of suppliers down.
Purchasing costs are also being reduced
through increasing purchases from lowcost countries (LCCs). LCC sourcing is being
strengthened within Europe in particular. In
addition, a common supplier platform has
been created for low-cost European countries
to supply all of Gunnebo’s European units and
reduce the total number of suppliers. There
is also a dedicated sourcing function in China
which supports the sourcing of products from
the local Chinese market and Asia as a whole
to all plants across the Group.
VALUE ENGINEERING
As well as bringing down costs by sourcing
from low-cost countries and cooperating
closely with suppliers, Gunnebo also works
internally to reduce the cost of products
through value engineering.
Value engineering is a method which systematically increases the value of a product
either by improving its function or removing
cost. By making a constant cycle of product
reviews, part by part, a plant identifies cases
for re-development. By redesigning a specific product part, for example, Gunnebo’s
Hamilton plant in the USA reduced the number of pieces in the component from 19 to
just two, generating considerable savings.
Gunnebo’s plant in Doetinchem, the main
producer of ATM safes in the Group, has also
worked with value engineering during the
year, focusing on cost reductions from better
importance. As an integral part of GOS, health
and safety has a defined wanted position and
is measured using key performance indicators
(KPIs) in the same way as other areas such as
on-time delivery and production quality.
During 2014, an audit was conducted
at four plants – Jakarta in Indonesia, Halol
in India, Markersdorf in Germany and
Bazancourt in France – to gauge the current
standards being met and establish a two-year
roadmap for attaining the wanted position.
Five of Gunnebo’s plants have already been
awarded the OHSAS 18001 certification for
health and safety management systems. The
plants in Baldenheim (France) and Wadeville
(South Africa) are planned for assessment
material usage and more efficient design.
during 2015. The goal is to introduce the
standard at all units by the end of 2016.
OCCUPATIONAL HEALTH
Maintaining and improving health and safety
standards at Gunnebo’s plants is of the utmost
Increased Customer Value through Production Efficiency
Uwe Sträter is Operations’ D
irector
of Industrial Development and
oversees the continued implementation of GOS (the Gunnebo
Operations System) in the Group’s
manufacturing plants.
GOS was launched in 2013. What impact
has it made on Gunnebo’s manufacturing
processes?
“The introduction of GOS means we now
have a common approach to our way of
manufacturing in all factories. One of the
key tenets of the platform is continuous
improvement so we have also become more
attuned to learning from one another and
sharing best practices. This has meant that
our general performance in terms of quality, on-time delivery and cost efficiency has
significantly improved.”
What has been the main focus for GOS
in 2014?
“To enable us to measure the progress we
are making towards our goals, we developed and introduced a self-assessment
system during 2014. In parallel with the
implementation of GOS, this was carried
out in all of the Group’s factories during the
first half of the year. The results then allowed us to create individual improvement
plans for each plant by mapping the route
towards achieving our wanted position.”
Can you give any examples of where GOS
has made an impact?
“Halol in India is a positive example. The
plant has fully embraced the Gunnebo
Operations System and has begun working
with many tools, such as Visual Management and Value Stream Analysis, to ensure
that continuous improvements are being
made. This philosophy permeates the dayto-day activities throughout the factory and
has resulted in many savings due to more
efficient manufacturing processes.”
Looking forward, what will be the main
focus for GOS in 2015?
“During 2015 we will be focused on the
Uwe Sträter, Director of Industrial Development
implementation plans and making defined improvements to our KPIs in each
of our factories. We have also set a target
to increase the proportion of Operations
employees actively involved in continuous improvement projects. In addition, we
will be putting an emphasis on health and
safety standards – an area which was integrated into the GOS audit during 2014.”
…our general performance in terms of
quality, on-time delivery and cost efficiency
has significantly improved.
29
CORPORatE RESPOnSiBilitY
Taking Responsibility for the Future
Gunnebo’s aim is to create a sustainable and profitable business with satisfied
customers and committed employees, to reduce impact on the environment,
and maintain a strong bond of trust with all of our stakeholders.
BuSINeSS reSPONSIBIlIty
eNvIrONMeNtAl reSPONSIBIlIty
Gunnebo’s contribution to sustainable development is founded on the Group’s responsibility for its own business, the environment
and society.
Gunnebo sets clear, long-term environmental
goals and works continuously to minimise its
impact on the environment through improvements to product design, production, purchasing, logistics, energy consumption and
waste management.
SOcIAl reSPONSIBIlIty
In keeping with its mission to create a safer
world, Gunnebo provides greater security
for the individual and contributes to making
everyday life safer for everyone. Gunnebo is
an employer that cares about the health and
safety of its employees and guarantees fair
pay in all the markets where it is present.
Read more on pages 32–33.
cOde Of cONduct
As a global organisation, it is Gunnebo’s
ambition to comply with human rights principles in all controllable aspects of its business.
Through Gunnebo’s Code of Conduct, employees are given clear guidelines describing
how they should act in an ethical manner in
every aspect of their jobs.
The Group’s Code of Conduct is based on
the UN Declaration of Human Rights, the UN
Global Compact initiative, the International
Labour Organization’s principles on rights in
working life and OECD guidelines for multinational enterprises.
The Code of Conduct provides employees
with clear guidelines on how to act professionally in their interactions with customers,
partners, suppliers, society and colleagues.
To ensure that this information is correctly
understood, all employees have access to a
course to educate them about the Code of
Conduct and its contents.
Gunnebo also encourages its suppliers
to adhere to the Code of Conduct and uses
the principles therein among the criteria for
selecting new business partners.
Social
Social
Business
Strong, clear leadership
focusing on building
a profitable and
ethical business
30
A safer society and an
employer that cares
about employee
health and safety
Environmental
A business that
minimises its impact
on the environment
PEOPLE AND LEADERSHIP
A Corporate Culture Focused on Performance
and Personal Development
At the end of 2014, Gunnebo had
5,670 (5,612) employees in 33 (33)
countries.
Leadership Values
During 2014, Gunnebo developed and
introduced the Performance Cornerstones
to establish a stronger performance culture
within the Group and link leadership
behaviour to business goals.
As the Performance Cornerstones are
implemented, they will establish a clear framework for leaders – and employees as a whole
– ensuring that everyone across the Group
has the same basic understanding of the type
of behaviour required to make Gunnebo a
successful, target-oriented organisation.
Employees by country
Gunnebo’s Performance Cornerstones have
been made an integral part of the Group’s
performance development reviews for all
employees, and for the recruitment of whitecollar workers. The strength of each candidate is assessed with relation to every aspect
of the Performance Cornerstones.
Personal Development
Structured performance development
reviews (PDRs) are conducted annually
with employees to facilitate the setting of
goals and formalise the assessment of the
progress each individual is making within
the company.
Regular reviews like this are an essential part of helping employees to grow. In
conjunction with the introduction of the
Employees by organisation
Region EMEA, 36%
Region Asia-Pacific, 19%
Region Americas, 9%
Corporate functions, 1%
Operations, 35%
India, 20%
France, 17%
Indonesia, 15%
Netherlands, 5%
UK, 5%
Germany, 4%
Spain, 4%
USA, 4%
South Africa, 3%
Sweden, 3%
Others, 20%
erformance Cornerstones, Gunnebo revi
P
talised its PDR process during 2014, so that
individual development is now related
directly to those behaviours described by the
Performance Cornerstones.
Careers
Gunnebo offers many stimulating career
opportunities in a wide range of disciplines
and locations. Gunnebo carries out an annual
review of employees’ expertise and development opportunities within the company.
This allows individual employees to optimise
their potential and also means that departing
employees can be effectively replaced in a
timely manner.
Education
To facilitate the dissemination of know
ledge and to make education accessible to
as many of the Group’s employees as possible, Gunnebo has an online training centre
which offers e-courses. The Gunnebo Training
Centre covers a range of topics from strategy
and product functionality to maintenance
procedures and certification methodology.
In 2014, 1,947 employees underwent 6,851
hours of education. Taking courses online
also contributes to reducing the costs and
impact on the environment associated with
travelling.
Diversity
Gender distribution
Managers
71%
29%
85%
15%
Employees
With sales companies, production plants and
customers around the world, Gunnebo is by
its nature a diverse organisation. Having a
presence on 33 markets, as well as branch
offices in several other countries, ensures the
Group’s cultural diversity and allows Gunnebo
to establish close, long-lasting customer
relationships.
Cultural exchange is a significant benefit
of having a global organisation and Gunnebo
encourages the sharing of knowledge across
the Group to raise its employees’ general
understanding of other cultures.
31
ENVIRONMENTAL MANAGEMENT
Reducing the Group’s Impact
on the Environment
Gunnebo is raising its requirements
for health & safety and has launched
a new set of environmental targets
that cover the supply chain.
Environmental Targets
Gunnebo’s new environmental targets for the
period 2014–2018 are described in the table
below.
The previous environmental targets for
2009–2013 were achieved during that period.
Since Gunnebo is now entering into a new
period, it is taking the opportunity to extend
its sustainability targets to more areas and to
include all the Group’s companies. To increase
transparency, transport is being accounted
for separately from the CO2 target. The Group
is taking an inventory of the company’s transport flows and aims to return with figures for
emissions from the transport of goods and
people in 2015.
To see comparison figures for previous
periods, go to www.gunnebogroup.com.
Health & Safety
OHSAS 18001 sets out requirements for health
and safety management systems. These standards provide assurances that an organisation
is managing occupational health and safety
risks. Gunnebo’s plants in Trier, Bazancourt,
Markersdorf, Doetinchem and Jakarta are all
OHSAS 18001 certified and during 2014, the
Gunnebo Executive Team took the decision to
32 make OHSAS 18001 certification compulsory
for all production facilities by 2016. Read more
about the health and safety audits carried out
by Operations during 2014 on page 29.
During 2014 Gunnebo also took the decision to set higher minimum standards for its
working environments than is required by
the legislation in several countries. In specific
areas, European standards will apply to all
plants regardless of geographical location.
These relate to the quality of waste water
outside of Europe are visited annually. In 2014
there were 15 significant suppliers. From 2015
onwards, the European “top-spend suppliers”
will also be audited annually. The purchasing
agreement with significant suppliers already
includes a clause where suppliers are requested to meet the standards laid out in Gunnebo’s
Code of Conduct. Read more about Sourcing
and Procurement on pages 28–29.
With almost 6,000 employees, Gunnebo is
a large consumer of computer equipment. It
from industrial processes, indoor air quality,
requirements for personal protection equipment, scope of medical examinations for
staff, and the chemical substances that may
be used in production. These changes are to
come into effect over the next few years.
is therefore also natural that the Group’s PC
suppliers are evaluated according to the same
sustainable parameters. Gunnebo’s chosen
supplier is active within the domain of corporate responsibility regarding the origin of
components.
Value Chain
Conflict Minerals
The Group has a large international supplier
base which makes maintaining high standards
in the supply chain challenging. One-fifth of
the Group’s suppliers account for 75% of the
total external spend, while within Europe and
the Middle East the same proportion accounts
for 90.5%. These “significant suppliers” are
impartially evaluated on parameters such as
price, quality and reliability. In 2014, Gunnebo
also started assessing its suppliers from an
environmental, social and ethical perspective. The main tool for an ethical evaluation of
business partners is a checklist based on the
UN Global Compact (incorporated 2014) together with a site visit. All significant suppliers
During 2014, the Group started to examine
the origin of the minerals in its electronic
products. The purpose is to avoid conflict
minerals, i.e. to ensure the minerals the
Group uses do not originate from areas of
conflict in the Democratic Republic of Congo
or adjoining countries. The goal is that all
direct suppliers will be self-certified during
2015.
LOGISTICS
Intelligent Distribution to Market
To continuously find the best solutions to
bring products to market, it is in the Group’s
interest to find the most efficient route, both
Suppliers
Power consumption at own sites
Goals
100% of leading direct suppliers and subcontractors to
production and sales companies to be CSR audited by the
end of 2016.
100% of all suppliers affected to be self-certified and free
of conflict minerals by the end of 2016.
Reduction in total annual consumption of electricity, related to
sales, by 2% a year to 2018, starting from the 2014 value.
Comment
Work began in 2014 and is continuing in 2015.
Refers to raw materials and components.
Four of Gunnebo’s factories in Germany, the Netherlands, China
and Italy run on renewable electricity. Total electricity consumption amounted to 20GWh.
Refers to production and offices.
from an environmental and cost perspective.
During 2014 the transport routes to UK and
Sweden were improved. In the UK this resulted
in a reduction in the transportation of goods
from a central warehouse in Germany by 50%,
corresponding to an anticipated saving of
EUR 40,000.
Better utilisation of storage space through
outsourcing the central warehouse has
resulted in lower CO2 emissions. Read more
about this under Logistics on page 28.
Actively working to reduce emissions is a
requirement Gunnebo sets when procuring
transport solutions.
Travel
Gunnebo has signed a Group-wide agreement
with a global travel supplier and is expected
to be able to deliver reliable data for travelrelated emissions for 2015.
MINIMISING Environmental Impact
A new car fleet policy with stricter targets
was adopted by the Gunnebo Executive Team.
All new vehicles used across the Group must
adhere to conditions that will significantly
lower average CO2 emissions.
Operations
Trier: Natural gas consumption was reduced by smarter heating of water. Old
refrigeration systems were replaced which
has led to a significant drop in electricity
consumption.
unshan: The plant, which was opened in
K
2011, achieved its ISO 14001 certification
in 2014.
Doetinchem: The waste management
process was improved by installing a system to separate oil. Continuous improvements, driven by the Gunnebo Operations
System (GOS), resulted in better lead times
and more efficient processes which had
a positive effect on energy consumption.
Also, awareness training on environmental
risks and behaviour was carried out during
2014.
alol: 40 trees were planted as part of a
H
green belt development programme.
Baldenheim: The heating system was
modernised to increase energy efficiency.
J akarta: Replacement of the compressor
system is expected to reduce electricity
consumption by 6%, the equivalent of 174
tonnes of CO2 per year.
Products
During 2014, Gunnebo launched a range of
thermally insulated security doors, windows
and partitions that lower the rate of heat loss
by 72%. The range is not only compliant with
the European Union Directive 2012/27/EU for
the energy performance of buildings, but is
also bullet-resistant and burglary-resistant.
Furthermore 99.9% of the material used in
the new security doors can be recycled. Read
more about the new products introduced by
Gunnebo during 2014 on pages 12–13.
Elsewhere continuous improvements are
being made towards ever more eco-friendly
entrance and speed gates. Increased remote
connectivity provides quicker service and
fewer on-site visits from technicians which
leads to a reduction in fuel consumption and,
therefore, lower emissions. Fewer hours on
the road also means a significantly reduced
risk for service staff. The goal is, by 2017, to
have all products controlled by an electronics
platform which can be accessed remotely.
In addition, reducing the complexity of each
range by sharing more core components will
have a positive impact on training, storage,
servicing and usability.
Recycling
Safes, which are constructed predominantly
of steel and different concretes, typically
have a long lifecycle. Premium quality safes,
for example, last for decades. In many countries Gunnebo arranges the removal of safes
that are no longer in use. A small percentage
of these are then updated for sale on the
second-hand market and in other cases the
product is recycled by a third party. The steel
is melted down and the concrete is reprocessed, ensuring that almost all of the original
material can be reused. All electronics are
sent for recycling.
Carbon dioxide emissions from own sites
Waste recycling
Transport and distribution
Reduction in emissions of carbon dioxide
relating to sales by 5% from 2014 to 2018.
Increase in amount of recycled waste of 5% from
2015 to 2018.
Continuous improvement in the transport chain
paves the way for cost efficiency, productivity
and lower environmental cost.
Emissions for production and electricity
amounted to 14,000 tonnes of CO2.
Refers to production and offices.
The amount of recycled waste totals 84%. Steel
and electronic waste from the factories is virtually completely recycled. A lot of the purchased
steel raw material comes from recycled materials.
Refers to own plants and offices.
Approximately 51% of emissions are generated
by road transport, 30% by shipping and 19% by
aviation.
Refers to purchased goods transport.
Gunnebo Annual Report 2014 33
Gunnebo is a Swedish public limited company listed on NASDAQ OMX
Stockholm, Mid Cap. The company applies the Swedish Corporate Governance
Code and hereby submits its 2014 Corporate Governance Report.
Gunnebo AB (publ) is listed on the NASDAQ Stockholm and, in addition to Swedish law, the Group’s corporate governance is based on the
Swedish Corporate Governance Code (referred to below as “the Code”),
NASDAQ OMX Stockholm AB’s Rule Book for Issuers and the Swedish
Securities Council’s statements. This Report summarises the structure
of corporate governance and how corporate governance has been performed and developed within the Group during the 2014 financial year.
Gunnebo complies with the regulations of the Code in all respects.
and efficient governance and effective control over the Group’s operations to ensure that it meets established targets, applicable legislation
and other regulations.
In 2014, the following groups were primarily in charge of the governance, management, control and divisions of responsibilities at
Gunnebo:
Shareholders
Governance and division of responsibilities
Corporate governance structured around the Group’s operations is
essential to commercial success and increased profitability. Effective
corporate governance involves a well-defined division of duties and
responsibilities, transparency vis-a-vis the shareholders and the market
Board of Directors
President
O
perational management groups in regions, sales companies,
Entrance Control as well as Operations
Group corporate functions
Overview of Gunnebo’s Corporate Governance
Shareholders
Annual General Meeting
External Auditors
Important external
regulations
Swedish Companies Act and
Annual Accounts Act
ASDAQ OMX Stockholm AB’s
N
Rule Book for Issuers
Swedish Corporate Governance Code
34 Nominations Committee
Board of Directors
Remuneration Committee
Audit Committee
President and
Corporate Functions
Operational Boards
Management teams in Regions, Sales
Companies, Entrance Control and Operations
Important internal
governing documents
Articles of Association
I nstructions and rules of procedure
(Board, President and Board committees)
Policies and guidelines
The Group’s Code of Conduct
Shareholders and the share
Nomination Committee
For information about shareholders and the Gunnebo share, refer to
pages 92–93 and www.gunnebogroup.com.
The task of the Nomination Committee is to present proposals to
the Annual General Meeting for decisions in such matters as the
election of the Chairman of the Meeting, Board members (number,
name and Chairman), fees to the Board of Directors, remuneration
for Committee work, auditor’s fees, procedures for the appointment
of the Nomination Committee and, where applicable, the election of
auditors. It was decided at the 2014 Annual General Meeting that, for
the period until the 2015 Annual General Meeting, Gunnebo’s Nomination Committee would consist of one representative from each of
the three largest shareholders as of 30 September 2014 as well as the
Chairman of the Board. This means that the following shareholder
representatives constituted the Nomination Committee for the period until the 2015 Annual General Meeting: Dan Sten Olsson (Stena
Adactum), Nils-Olov Jönsson (Vätterledens Invest), Ricard Wennerklint
(If Skadeförsäkring) and Martin Svalstedt, Chairman of the Board and
convener. The Chairman of the Nomination Committee is Dan Sten
Olsson. In the Nomination Committee’s opinion, all of the Committee
members are independent of the company and its executive management. Furthermore, Nils-Olov Jönsson and Ricard Wennerklint are
deemed to be independent of the company’s largest shareholder in
terms of votes. No remuneration is paid by the company to the members for their work on the Nomination Committee. The Nomination
Committee held one meeting prior to the date of this Annual Report.
Contact the Nomination Committee by post to Gunnebo AB at the
address printed on page 96 or by e-mail to valberedningen@gunnebo.com.
General Meetings
Shareholders exercise their influence at the Annual General Meeting
or, if held, at Extraordinary General Meetings, which are Gunnebo’s
highest decision-making bodies. All shareholders registered in the
transcript or other statement of the shareholders’ register a certain
amount of time before the Meeting and who have registered their
attendance at the Meeting before the stipulated deadline in the notice
to attend are entitled to participate in the Meeting and exercise full
voting rights. Shareholders who are unable to attend the Meeting in
person may appoint a proxy. Shareholders wishing to have an issue addressed by a General Meeting should submit their request to the Board
by e-mail to info@gunnebo.com or by post to Gunnebo AB at the address printed on page 96 of this Annual Report. Such a request should
be submitted far enough in advance to be included in the convening
notice to the General Meeting.
2014 Annual General Meeting
The 2014 Annual General Meeting (AGM) was held on 10 April at the
Chalmers Student Union building in Gothenburg. A total of 110 shareholders took part in the Meeting, representing 60% of the number
of shares and votes in the company. Chairman of the Board Martin
Svalstedt was elected Chairman of the Meeting. All Board members
elected by the Meeting were in attendance.
Minutes from the AGM have been published on Gunnebo’s website:
www.gunnebogroup.com. The Meeting adopted resolutions including:
A dividend according to the Board and President’s proposal of
SEK 1.00 per share for the 2013 financial year.
Re-election of all Board members
Re-election of Martin Svalstedt as Chairman of the Board
Determination of remuneration to the Board of Directors and auditor
Guidelines for remuneration of senior executives
Process for appointments to the Nomination Committee
Election of Deloitte AB as the company’s auditor until the end of the
The next Annual General Meeting of shareholders in Gunnebo will be
held in the Chalmers Student Union building, Chalmersplatsen 1, in
Gothenburg on Wednesday, 15 April 2015. More information about
the Annual General Meeting is available on page 89 of this Annual
Report and will be published on www.gunnebogroup.com.
Gunnebo Annual Report 2014 Board
The overall task of the Board of Directors is to manage the interests
of the company and all of its shareholders. It is also the Board’s duty
and responsibility to ensure that this Corporate Governance Report
is prepared. The Articles of Association stipulate that the Board shall
comprise no fewer than five and no more than seven members, with
no more than two deputies.
The 2014 Annual General Meeting resolved that, for the period until
the 2015 Annual General Meeting, Gunnebo’s Board would comprise
six ordinary members and no deputies. In addition, Gunnebo’s Swedish
trade unions are entitled to appoint two ordinary Board members and
two deputies.
The Chairman of the Board is appointed by the Annual General
Meeting. None of Gunnebo’s senior executives are members of the
Board. The President and the CFO participate at Board meetings, the
latter also serving as secretary. Furthermore, other senior executives
participate at meetings whenever required.
35
Independence of Board members
Evaluation of the Board’s work
Pursuant to the Code, the majority of Board members elected at the
Annual General Meeting must be independent of the company and its
executive management. At least two members who are independent
of the company and its executive management must also be independent of the company’s major shareholders. The shareholdings of
the individual Board members and their independence of the company, its executive management and the major shareholders, and other
assignments in other companies are presented in the table on page 38
and the presentation of Board members on page 42.
The work of the Board is evaluated every year by a survey, the results
of which form the basis for continuous improvements to the Board’s
work. The evaluation, for which the Chairman of the Board is responsible, includes issues regarding the composition of the Board, meetings,
material, Committees and the manner in which the Chairman of the
Board and the Board perform their main duties in accordance with
the Code. The evaluation also serves as a basis for the Nomination
Committee’s proposals concerning Board members and remuneration
levels.
The Board’s rules of procedure
Chairman
The Board’s work is primarily governed by the Swedish Companies Act,
the Code and the Board’s rules of procedure. The rules of procedure are
adopted every year at the statutory meeting of the Board. The current
rules of procedure state that the Board shall hold at least six scheduled
meetings between Annual General Meetings and describe the matters
to be addressed at each meeting. The rules of procedure also outline the division of work and responsibilities between the Board, the
Chairman, the Board Committees and the President.
The Board’s tasks include adopting strategies, business plans, operational targets, interim reports and year-end reports. Furthermore, it is
the Board’s duty to decide on significant changes to the organisation
of Gunnebo and its business activities and continuously evaluate the
work of the President.
Martin Svalstedt was re-elected the Chairman of the Board of
Directors at the Annual General Meeting held on 10 April 2014. It is
the Chairman of the Board’s responsibility to ensure that the Board’s
work is conducted efficiently. This includes ensuring that the Board
completes its duties, and monitoring the progress of the company and
ensuring that the other members continuously receive the information
required for the Board to perform its work to the necessary standard
and in accordance with the relevant regulations. The Chairman does
not participate in the operational management of the company.
Meetings’ report
In 2014, the Board held seven scheduled meetings (in addition to the
statutory meeting) and two extra meetings. During these meetings,
reports from the President, the accounts at the close of interim periods, the budget for 2015, interim and annual reports, financial statements, reports from the Board’s Committees and the Nomination
Committee, and items pertaining to the Annual General Meeting were
addressed. The following topics were also discussed:
Strategic issues
Investment issues
Acquisition of Clear Image MMS Ltd, UK
Divestment of Fichet-Bauche Télésurveillance, France
Acquisition of Diseños Inteligentes de Seguridad S.A de C.V, Mexico
New establishments
AGM items
Board evaluations
Evaluation of President
No Board members registered reservations against any decisions during the year.
36 Committees
During 2014, the Board of Directors of Gunnebo had two Committees:
the Remuneration Committee and the Audit Committee. The representatives sitting on these Committees are appointed by the Board
from among its own ranks.
Remuneration Committee
The Remuneration Committee’s task includes preparing issues pertaining to the conditions of employment for the Group Executive
Team, succession planning and other personnel development issues
prepared by the Group Executive Team and the Group’s SVP HR. The
Remuneration Committee also evaluates the application of the guidelines for remuneration to senior executives adopted by the Annual
General Meeting. The Remuneration Committee follows written rules
of procedure.
Following the Annual General Meeting held on 10 April 2014, the
Committee comprised Martin Svalstedt (Chairman), Mikael Jönsson
and Göran Bille. All of the members of the Remuneration Committee
are independent of the company and company management and one
member is also independent of the company’s major shareholders. The
Committee held five meetings during the year, at which items such as
bonus models, bonus outcomes and guidelines for remuneration to
senior executives were discussed. The attendance of the Committee
members at meetings is presented in the table on page 38.
Audit Committee
The Audit Committee is a preparatory body for contact between the
Board and the auditors. The Audit Committee follows written rules
of procedure. The Committee’s duties also include examining and
monitoring the Group’s financial reporting, external reporting, internal
control and ensuring the management and reporting of financial risks.
Following the Annual General Meeting held on 10 April 2014, the
Committee comprised Bo Dankis (Chairman), Mikael Jönsson and Tore
Bertilsson. All of the members of the Audit Committee are indepen
dent of the company and company management and, with the exception of Mikael Jönsson, the company’s major shareholders.
The Committee held eight meetings during the year and the Group’s
auditors participated in five of these. The Group’s auditors also participated at one Board meeting to present an account of their audit.
Issues including the annual and interim accounts, the auditors’ audit,
risk management, internal control and the election of an auditor were
discussed during the year. The attendance of the Committee members
at meetings is presented in the table on page 38.
External audit
Gunnebo’s auditors are elected at the Annual General Meeting. At the
2014 Annual General Meeting, the registered public accounting firm
Deloitte AB was elected as the auditor with Jan Nilsson as the Auditor
in Charge. The current mandate period expires at the 2015 Annual
General Meeting. The auditor’s report on their audit to the Audit
Committee and the Board of Directors. In addition to their standard
audit assignments, Deloitte provides assistance in the form of advisory
and investigative assignments. The assignments performed are not
deemed to give rise to a disqualification situation. Information regarding fees to auditors is provided in Note 33.
President & CEO and Group Executive Team
The meetings mainly focused on the Group’s strategic and operational
development as well as performance monitoring.
Corporate functions
Gunnebo’s head office houses the corporate functions for the coordination of Operations (production, quality, logistics and purchasing),
CFO (finance, financial control, business control, legal affairs, IT, investor relations and acquisitions), Human Resources, and Marketing and
Service. These functions are responsible for preparing relevant Groupwide strategies and activity plans for their respective areas of responsibility and for driving, supporting and controlling the development of
the organisation based on their respective areas of expertise.
Operational management
Gunnebo’s operating activities consist of the regions EMEA,
Asia-Pacific and the Americas with sales companies, and the business
unit Entrance Control as well as Operations. Each unit has an operational Board, which is responsible for the unit’s business operations.
The operational Boards are the bodies under the Group Executive
Team that are responsible for ensuring and following up on the implementation of the decisions made. Other members of the operational
boards include representatives from the Group Executive Team and
representatives from the management groups of each of the units.
These management groups are responsible for leading the day-to-day
operations in each unit and usually comprise the head of each unit and
the most important heads of corporate functions.
Financial reporting
Each region and sales company, Entrance Control as well as
Operations, reports its financial outcomes every month. The major
sales companies also report certain key figures on a weekly basis.
Per Borgvall is Gunnebo’s President and CEO and leads Gunnebo’s
business activities. The President is also responsible for ensuring that
the Board receives the information and material necessary for making
decisions. Furthermore, he presents reports at Board meetings and
continuously keeps the Board and Chairman informed of the Group’s
and company’s financial position and performance.
It is the President’s responsibility to implement and ensure the
execution of the strategies, business plans and operational targets
adopted by the Board.
The President is assisted by a Group Executive Team comprising
managers for regions, Entrance Control, Operations and corporate
functions. At year-end 2014, the Group Executive Team consisted of
eight individuals. These individuals are presented on page 43 of this
Annual Report. In 2014, the Group Executive Team held 12 meetings.
These reports are compiled by the central finance, financial control and
business control corporate functions, and form the basis of further
analyses and interim reporting to shareholders and the stock market.
Incentive programme
The 2010 Annual General Meeting resolved to adopt an initial component of a “rolling” incentive programme comprising warrants (Incentive Programme 2010/2014). A total of 550,000 warrants were offered
to 46 senior executives and other key individuals in the Group. The
warrants were valued at market value externally in accordance with
the Black & Scholes valuation model and the price per warrant was set
at SEK 3.30. A warrant entitles the holder to subscribe for a share in
Gunnebo AB for SEK 32.00 during certain fixed periods between 2013
and 2014. During 2014, a total of 259,403 new shares were registered
through the exercise of warrants issued within the framework of the
Incentive Programme 2010–2014.
In conjunction with the 2011 Annual General Meeting, a second
component of the rolling incentive programme (Incentive Programme
2011/2015) was adopted. A total of 575,000 warrants were offered
to 49 senior executives and other key individuals in the Group. The
arrants were valued at market value externally in accordance with
w
Black & Scholes valuation model and the price per warrant was set
and 2015.
In conjunction with the 2012 Annual General Meeting, a third
component of the rolling incentive programme (Incentive Programme
2012/2016) was adopted. A total of 585,000 warrants were offered to
50 senior executives and other key individuals in the Group. The warrants were valued at market value externally in accordance with the
Black & Scholes valuation model and the price per warrant was set
and 2016.
Since the participants, within the scope of the above incentive
programme, have been offered acquisition of warrants at market price,
the programme is not deemed to entail any accounting salary costs or
similar costs in accordance with IFRS 2.
However, costs in the form of social security charges may be payable in certain countries.
Statistics on Attendance and Independence of Board Members 2014
Independent in relation to:
Name
Elected at Annual General Meeting
Elected
Board meetings
Remuneration
Committee
5 (C)
Martin Svalstedt
2003
10 (C)
Tore Bertilsson
2012
10 (M)
Göran Bille
2008
10 (M)
Charlotte Brogren
2012
10 (M)
Bo Dankis
2006
9 (M)
Mikael Jönsson
2000
10 (M)
Crister Carlsson
2010
10 (M)
Irene Thorin
2012
10 (M)
The company’s
largest
shareholders
Total
remuneration,
SEK
Yes
No
475,000
Yes
Yes
267,500
Yes
Yes
267,500
Yes
Yes
237,500
8 (C)
Yes
Yes
287,500
8 (M)
Yes
No
297,500
Audit
Committee
8 (M)
4 (M)
5 (M)
The company
and executive
management
Employee representatives
Number of meetings:
10
38,700
38,700
5
8
Total: 1,909,900
C=Chairman M=Member
Board of Directors’ Report on Internal Control
The responsibility of the Board of Directors for internal control is
regulated in the Swedish Companies Act and in the Swedish Corporate
Governance Code. Gunnebo AB applies and adheres to the requirements for internal governance and control stipulated by Swedish law
(Companies Act and Annual Accounts Act) and the Swedish Corporate
Governance Code (“the Code”). Accordingly, the Report is limited to a
description of how internal control is organised with regard to financial reporting.
Internal control of financial reporting
The internal governance and control process involves the Board,
Audit Committee, President, Group Executive Team, corporate staffs,
operational boards and other personnel. The purpose of the process
is to ensure fulfilment of the Group’s goals in terms of relevant and
efficient processes, to obtain reasonable assurance with respect to the
reliability of external financial reporting in the form of interim reports,
annual reports and year-end reports and to ensure that this reporting is prepared in accordance with law, applicable financial reporting
standards and other requirements on listed companies.
Control environment
Gunnebo’s Board of Directors has overall responsibility for establishing
an efficient system for the internal control of financial reporting and
operations in general. The Board has established rules of procedure
that clarify the responsibilities of the Board and regulate the division
of duties between the Board and the Board Committees. The Board of
Directors’ Audit Committee monitors the financial reporting, internal
control and risk management within Gunnebo. The Audit Committee
also represents the Board of Directors in connection with external
audits and stays informed about audits of the Annual Report and the
consolidated financial statements, and also stays informed about dayto-day finance activities. The Board of Directors has prepared instructions for the President and instructions for financial reporting to the
Board of Directors. The operational responsibility for maintaining an
efficient control environment is delegated to the President and this
responsibility is exercised by the President together with the Group
Executive Team, operational boards and management, as well as
Group staff. Gunnebo’s Code of Conduct is fundamental to the control
environment and highlights the basic principles that govern operations. The structure of the internal governance and control is described
on page 34 and the various functions that are included interact based
on approved divisions of responsibility and relevant governing documents, in addition to the above-named documents, including the
Authorisation Policy and Finance Policy.
Gunnebo Annual Report 2014 Risk assessment
Risk assessment is an integrated part of the Group’s business, from
the strategy process to budget, financial forecasts, implementation
and follow-up. Furthermore, it is combined with other information
that may influence risks, such as major changes with regard to the
organisation, senior executives, systems or new operations and acquisitions. The risks identified are managed through the Group’s control
structures and continuously monitored with the aim of implementing
measures, identifying and evaluating processes and ensuring good
quality in financial reporting. More information about the Group’s risks
is available in the section “Risk and Sensitivity Analysis”, pages 44–47,
and in Note 3, “Financial Risk Management and Financial Instruments”.
Control activities
Control activities are performed at various levels within Gunnebo. The
Group Executive Team is ultimately responsible for implementing and
ensuring that controls are performed at both a general and detailed
operational level. This is achieved by ongoing governance and control
of the accounts and financial reporting carried out by the finance functions of the local companies, regions and the corporate finance functions in conjunction with reporting and consolidation. The controller
network in the various organisational units performs detailed financial
analyses of earnings, key ratios, tied-up capital, trends and the followup of budgets and forecasts. In addition, more detailed analyses are
performed as required.
The Group’s risks with regard to financial reporting are related to
the risk that material misstatements may arise in the reporting of the
company’s financial position and performance. The company’s reporting instructions and established monitoring procedures aim to minimise these risks.
Information and communication
Gunnebo’s external and internal information and communication in
the form of reporting to various authorities, financial reporting and
information to the Board and employees takes place in accordance
with the requirements of the business environment, the Group’s internal governing documents and the Communication Policy. Accordingly,
all external and internal information and communication are to be
appropriate, up-to-date and correct, and should be available to the
target groups as and when required.
39
Internal information
Internal governing documents and guidelines pertaining to financial reporting are available to the relevant personnel on Gunnebo’s
intranet and are also communicated at meetings and through other
channels. The intranet contains policies, guidelines and specific instructions for financial reporting, internal control, closing of accounts,
budget and forecasts. The Gunnebo Training Centre (GTC) is a tool
used for training and facilitating communication of, for example, the
Group’s vision, targets, strategies and ethical dilemmas linked to the
Group’s Code of Conduct.
The Board receives regular reports on the financial statements and
earnings trends, analyses and comments on outcomes, plans and
forecasts. It also receives feedback from Audit Committee meetings,
at which the auditors present the results of their audits. Additionally,
there are various internal meeting forums, such as the International
Management Conference (IMC), and internal boards that also include
the monitoring of financial information and other important internal
matters on their fixed agendas.
External information
Information about the Group’s business is communicated to external
stakeholders on www.gunnebogroup.com, which contains publications, interim reports and other financial information, press releases
40 and information about Gunnebo’s organisation and market offering.
This information is also supplemented by meetings with investors and
analysts, which are logged in an internal database.
Follow-up
Regular monitoring of and reporting on operations is carried out
at different levels by the Board, Audit Committee, President, Group
Executive Team, corporate finance function and operational boards.
Monitoring of Group companies includes monthly and quarterly
reviews of outcomes compared with budget and forecasts, the results
of audits, etc. In addition to this, special efforts are monitored such
as activities linked with the implementation of the new strategy,
acquisitions and divestments. The Group’s internal control function
is an integrated part of the corporate finance function. The Board,
which annually evaluates the need for such a function, has deemed
that existing structures for monitoring, control and evaluation provide
satisfactory documentation. External auditors are engaged for certain
special audits.
See the Information for the Capital Market section on pages 89–91
for information about how communication and monitoring of the
Group’s financial reporting are carried out externally.
Auditor’s Report on the
This auditor´s report on the corporate governance report is a translation of the Swedish language original.
In the events of any differences between this translation and the Swedish original the latter shall prevail.
To the Annual General Meeting of Gunnebo AB
Corp. Reg. No. 556438-2629
It is the Board of Directors who is responsible for the Corporate Governance Report for the financial year January 1, 2014 to December 31, 2014
included in the printed version of this document on pages 34–40 and
that it has been prepared in accordance with the Annual Accounts Act.
We have read the Corporate Governance Report, and based on this
reading and our knowledge of the Group, we believe that we have
sufficient grounds for our opinions. This means that our statutory
examination of the Corporate Governance Report is different and
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing and generally accepted auditing
standards in Sweden.
In our opinion, the Corporate Governance Report has been prepared
and its statutory content is consistent with the annual accounts and
consolidated accounts.
Gothenburg, March 5, 2015
Deloitte AB
Jan Nilsson
Authorised Public Accountant
Board of Directors
Martin Svalstedt
Tore Bertilsson
Göran Bille
Chairman
Board member
Board member
Elected: 2003, Chairman
since 2008
Elected: 2012
Elected: 2008
Born: 1951
Born: 1955
Born: 1963
Nationality: Swedish
Main position: Professional board member
and industrial advisor
Main position:
President and CEO of
Gina Tricot
Education: Master of Science in Business
Administration
Administration
Professional background: Executive Vice President and CFO of AB SKF, Bank Director SEB
Professional background: President and
CEO of AB Lindex, senior positions at H&M
including President of H&M Rowells, C
ountry
Manager for H&M in Sweden, Division
Manager for H&M Woman
Main position: President
of Stena Adactum AB and
Stena Sessan AB
Administration
Professional background: CFO Capio AB,
senior financial posts at Stora and ABB
Other Board assignments: Chairman of Meda
AB, Ballingslöv International AB, Envac AB and
Stena Renewable AB, and member of Stena
Adactum AB and Stena Sessan AB
Other Board assignments: Chairman of PRI
Pensionsgaranti and Ludvig Svensson, member of IKEA Group, Stampen, JCE Group, Gamla
Livförsäkringsaktiebolaget SEB Trygg Liv and
Salinity
Shareholding: —
Shareholding: 180,000 (of which 60,000 via
endowment insurance)
Shareholding: 8,000
Charlotte Brogren
Bo Dankis
Mikael Jönsson
Board member
Board member
Board member
Elected: 2012
Elected: 2006
Elected: 2000
Born: 1963
Born: 1954
Born: 1963
Main position: Director
General of Vinnova
Education: Engineering PhD
Main position: Professional Board member
and industrial advisor
Main position:
President of
Vätterledens Invest AB
Professional background: Senior positions
in ABB
Education: Master of Science in Mechanical
Engineering
Education: University studies in economics
Other Board assignments: Chairperson of
Industrifonden. Member of HMS Industrial
Networks AB and QFree AS
Professional background: President of Assa
Abloy AB and Perstorp Group and senior
positions at Forsheda AB and ABB
Shareholding: 3,000
Other Board assignments: Chairman of The
Swedish Trade & Invest Council, IV Produkt,
Cleanergy, Gadelius Group Tokyo and the
Sweden-Japan Foundation.
Shareholding: 8,666 (of which 2,000 via
endowment insurance)
42 Other Board assignments: —
Crister Carlsson
Irene Thorin
Employee
representative
for Unionen
Employee
representative
for Unionen
Elected: 2010
Elected: 2011
Born: 1965
Born: 1959
Education: Electric
Power Engineering
Education: Economist,
upper secondary level
Shareholding: —
Shareholding: —
Professional background: Stockbroker, various
senior positions at Vätterledens Invest AB
Other Board assignments: Chairman of
Lids Industri AB and member of AB Trätälja,
Vätterledens Invest AB and its subsidiaries,
Kopparbergs bryggeri AB, Wipcore AB and
Nordic E-commerce Knowledge
Shareholding: 153,333
Per Borgvall
President and CEO
Christian
Johansson
Employed: 2009
Chief Financial Officer
Born: 1958
Employed: 2013
Born: 1963
Education: Master of
Science in Mechanical
Engineering, Chalmers
1982
Professional background: President and CEO
of AB Fagerhult; Divisional President of the
Indoor Climate division at British IMI Plc, President of Tour & Andersson AB and Uponor AB
Board assignments: Nederman Holding AB,
Louis Poulsen Lighting
Science in Business
Administration, Stockholm University and
INSEAD (Fountainbleau, France)
Professional background: Senior financial positions at Volvo, ABB and Alfa Laval,
Regional Manager for Central and Eastern
Europe at ABB Service
Board assignments: —
Anna Almlöf
SVP Strategy, Marketing
& Service
Employed: 2011
Born: 1967
Education: Economics
degree from Stockholm
School of Economics and Executive MBA from
Instituto de Empresa, Madrid
Professional background: Director of Product
Management at Ericsson Global Services and
other senior positions in sales and service at
Ericsson AB and Unisys, in Sweden and internationally.
Shareholding: 62,000
Shareholding: —
Warrants and share options: 70,000
Warrants and share options: —
Robert Hermans
Magnus
Lundbäck
Lars Thorén
Employed: 2012
Born: 1968
SVP Human Resources
& Sustainability
Employed: 2013
Science in Business
Administration from
Uppsala University and MBA from Stockholm
School of Economics
Born: 1969
Science in Engineering,
Chalmers and Executive MBA, University of Gothenburg School of
Business, Economics and Law
SVP Entrance Control
Employed: 1996
Professional background: Country Manager
Gunnebo South Africa, President Gunnebo
Lifting, Managing Director Cargo Control
Systems (South Africa) and other senior positions in marketing and sales in the Gunnebo
Industrier Group
Board assignments: Tsarmedia AB and Satpack
Travel, South Africa
Education: Licentiate of Engineering and
PhD in Strategy and Organisation from Luleå
University of Technology
Professional background: Executive Vice
President Human Resources and Sustainability
at the Getinge Group, Vice President of Human
Resources at Volvo Car Corporation
Shareholding: —
Shareholding: —
SVP Operations
Born: 1961
Professional background: Senior positions at
Volvo Buses, Sandvik Materials Technology,
ESAB and SKF
Shareholding: 800
Shareholding: —
Morten
Andreasen
Sacha de La Noë
SVP Region EMEA (Europe,
Middle East & Africa)
Employed: 2005, member of Group Executive
Team since 1 January
2015
Employed: 2012
Born: 1958
Nationality: Danish
Administration, PED from IMD (Lausanne)
Professional background: President of
Munters’ Moisture Control Services (MCS) division, Senior Vice President Lufthansa Service
Gesellschaft and CEO Top Flight Catering
Board assignments: Kosan Crisplant A/S
Shareholding: 5,000
SVP Region Asia-Pacific
Born: 1970
Administration, Warwick Business School, UK
Professional background: Regional Manager
for Gunnebo in South-East Asia, Manager of
Gunnebo Global ATM, senior financial positions at Gunnebo, Wilson Logistics Group,
Oriflame, Alfort & Cronholm Group
Tomas
Wängberg
SVP Region Americas
Employed: 2009
Born: 1958
Education: Marine Engineering, Chalmers 1981
Professional background: President and CEO
of ABS Group, AB Pharmadule, ABB Carbon AB
and senior positions in marketing, sales and
production at the ABB Group
Board assignments: HTC Group AB
Shareholding: 2,280
Shareholding: —
Gunnebo Annual
Årsredovisning
Report 2014
2014 43
Exposure to risk and uncertainty with regard to future development are natural aspects of all businesses. Risk awareness and good risk management are prerequisites for creating long-term value and for securing good profitability.
Gunnebo therefore continuously evaluates the risks to which the business is exposed, and carefully monitors the
development of factors that influence the main risks that have been identified.
Gunnebo is an international group with a broad geographical spread.
The Group currently has operations in 33 countries and production
units in 10 countries. The Group is therefore exposed to various kinds
of strategic, operational and financial risk. Strategic and operational
risks include business environment risks, raw material risks, production risks and legal risks. The financial risks are mainly linked to
changes in interest and exchange rates, as well as refinancing and
counterparty risks.
Risk management within the Group is an important part of the
governance and control of the Group’s operation and aims to identify,
evaluate and manage these types of risk and, thereby, mitigate their
potential effects.
The management groups in Gunnebo’s regions and sales companies
are responsible for developing strategies and identifying risks in their
market or area of responsibility. These management groups are supported by resources within central Group functions such as Finance,
Legal Affairs, Operations, Marketing & Service, and Human Resources
and by Group-wide principles, guidelines and instructions. The Group’s
risk management is systematically monitored by the Group Executive
Team, partly through a system of monthly reports whereby the management groups describe developments in their respective units,
along with identified risks. Further control is achieved through the
inclusion of representatives of the Group Executive Team on internal
boards of directors. The President reports continuously to the Board of
Directors about the development of the Group’s risks, and Gunnebo’s
Board has overall responsibility for the Group’s risk management and
for deciding the Group’s strategic direction.
Strategic and operational risks
Market risks
The Gunnebo Group’s operation and results are exposed to market
risks such as the impact of the business cycle on demand for the
Group’s products and services, and changes in customers’ investment
plans and production levels. The Group’s relatively broad product
range and customer structure, as well as its global market coverage
with sales and production in a large number of countries, provide a
good distribution of risk intended to restrict the effect of a change in
demand limited to a particular industry, region or country.
44 The operation’s geographical distribution naturally entails exposure
to business environment risks such as country-specific risks in the
form of political decisions and changes to regulations.
Raw material risks
The Gunnebo Group is exposed to risks related to supply and price
variations of raw materials and components. Competition on the
market may restrict the opportunity to fully offset cost increases
through price rises, even though the Group endeavours to enter
sales agreements which allow the price increases to be passed on
to customers.
Steel is the single largest raw material component in the Group.
Many different types and grades of steel are purchased on different
markets, resulting in differentiated price development. With the aim
of limiting the short-term effect of price fluctuations, a large part of
the Group’s steel requirement is purchased via index-based contracts.
Risks related to the Group’s purchases of more important input
goods are managed by co-ordinating and controlling procurement
through a central purchasing function, which for instance
appoints people responsible for certain categories of raw materials
or components.
Production risks
Gunnebo’s production operation takes place in twelve production units
and comprises a chain of processes where stoppages or disruptions
can have consequences on Gunnebo’s ability to fulfil its obligations to
customers. Gunnebo deals with risks relating to the Group’s property
and operational stoppages through a programme for identifying and
assessing such risks. The programme is applied at all of Gunnebo’s
production plants and aims to prevent these types of risks or, if an event
is beyond Gunnebo’s control, to mitigate the consequences.
The majority of components used in the Group’s products are
sourced from subcontractors. With the aim of minimising the risk of
one of these subcontractors being unable to deliver the component, or
to deliver on time, for any reason, Gunnebo actively strives to secure
alternative suppliers for critical components.
There is, therefore, usually more than one subcontractor that can
deliver a particular component. Furthermore, the Group’s purchasing
function works actively and continuously to evaluate and analyse the
Group’s suppliers from a risk perspective, for example.
Environmental impact primarily takes place in the production
process through material and energy consumption, emissions to
air and water, and the creation of noise and waste. To restrict the
environmental impact of production, the Group has the objective to
gain ISO 14001 certification for all production units. Risk analyses are
carried out in connection with such certification and through chemical
analyses during, for example, REACH work (Registration, Evaluation,
Authorisation and restriction of Chemicals). These risk analyses provide good information about the various risks at the production plants,
and relevant programmes of measures can therefore be implemented.
Acquisition of new operations
One of the Gunnebo Group’s goals is to grow. Growth should be
organic but supplemented by acquisitions. The aim is to carry out
more acquisitions on certain defined markets on an ongoing basis.
Acquisitions can entail various difficulties integrating the acquired
operation, which can lead to far higher costs for the acquisition
than estimated and/or that the synergies take longer to realise than
planned.
Acquisitions that do not develop as planned may also lead to high
write-down costs for goodwill and other intangible assets, which can
have a significant adverse effect on the Group’s results and financial
position.
The acquisition process is conducted in accordance with set instructions and guidelines. The Group’s function for Mergers & Acquisitions
has overall responsibility for evaluating and implementing acquisitions, and for ensuring that the established integration plans are
carried out.
Legal risks
The legal department within the Group is responsible for monitoring and controlling the management of legal risks within Gunnebo.
A Group-wide legal policy has been introduced which states, for example, that some matters of a legal nature must be escalated to the
legal affairs department. This includes stock exchange related issues,
competition law issues and issues relating to the Group’s intangible
Gunnebo Annual Report 2014 assets. With the aim of eliminating unwanted risks in the Group’s
customer and supplier agreements and to ensure the quality of these
agreements, instructions and guidelines have been issued on the more
important agreement terms, such as those relating to liability and
limitations on liability. Furthermore, the Group’s business areas have
access to agreement templates for the more common types of agreement. In addition to the above, there are also procedures for approving
agreements.
As a result of standard business operations, Gunnebo is a party in
various legal disputes. These disputes include, for example, commercial disputes and disputes regarding tax or labour law. Such outstanding and potential disputes are reported regularly to the Group’s legal
affairs department. Disputes can last a long time and entail high costs.
It can also be hard to predict the outcome of many disputes. A negative outcome in one particular dispute could have an important negative impact on the Group’s results and financial position. At the end of
2014, there were not deemed to be any disputes that could entail such
an effect.
Insurable risks
Gunnebo has established a Group-wide insurance programme to protect the Group’s insurable assets and interests. The programme covers
property and loss of profit insurance, general liability and product
liability, transport insurance, crime against property as well as claims for
damages against the Board and senior executives, for example. Linked
to the insurance programme is a programme for identifying and evaluating risks related to physical injury at the Group’s production plants
and related financial consequences. The results of these reviews are
summarised in a points system for risk exposure at each plant, enabling
the management to control the risks and to assess the need for riskreduction measures and establish priorities among these.
Financial risks
The object of Gunnebo’s financial activities is to minimise the Group’s
long-term financing costs and effectively manage and control its
financial risks such as changes in interest and exchange rates, as well
as refinancing and counterparty risks.
45
Organisation and activities
Gunnebo’s financial operations are managed through the subsidiary
Gunnebo Treasury AB which acts as the Group’s internal bank, is responsible for the Group’s currency and interest rate risk management, and
supports the subsidiary companies in currency transactions. Gunnebo
Treasury AB is also responsible for the Group’s liquidity management
and external borrowing, and assists the subsidiaries with loans and investments. Through this centralisation the Group is able to benefit from
economies of scale and synergies within the financial area.
The financial activities are carried out in accordance with the
finance policy established by the Board, which regulates how financial
risks are to be managed and the limits within which the internal bank
and Gunnebo’s subsidiaries may operate. The following financial risks
are covered, and regulated, by the finance policy:
F inancing risk Financing risk refers to the risk that financing of the
Group’s capital requirement and refinancing of its outstanding
borrowing are rendered more difficult or more expensive. In order to
limit the financing risk, the Group’s finance policy stipulates that the
total outstanding volume of borrowing must be covered by longterm credit facilities of at least twelve months at any given time.
I nterest rate risk The interest rate risk refers to the negative effect
on the Group’s income and cash flow of a lasting change in market
interest rates. The sensitivity of the income may, however, be limited through carefully selected interest maturity structures and by
entering into fixed-interest agreements in the form of interest rate
hedges. According to the finance policy, interest rate hedges may
entail a maximum hedge rate of 60% and the term may not exceed
36 months.
Liquidity risk Liquidity risk refers to the risk of not having access to
liquid funds or undrawn lines of credit in order to fulfil payment obligations. The Group’s finance policy stipulates that liquid funds and
undrawn lines of credit shall always amount to a minimum of MSEK
350. Surplus liquidity in the Group shall be invested with the internal
bank or in local cash pools. Gunnebo has centralised its liquidity
management in cash pools in the main European countries where it
operates and in the USA.
Currency risk The Group has operations in a large number of countries and is therefore exposed to currency risks. This can be partly
offset by hedging transactions in foreign currencies within the framework of the finance policy. For more detailed information about financial risk management and reporting of financial instruments, see
Note 3, “Financial risk management and financial instruments”.
Counterparty risk Counterparty risk or credit risk refers to the risk of
a loss if the counterparty fails to fulfil its obligations.
Financial credit risk Exposure to credit risk arises both when investing surplus liquidity, and in receivables from banks which arise via
derivative instruments. Gunnebo’s finance policy includes a special
list of permitted counterparties and maximum credit exposure with
each approved counterparty. Gunnebo has also entered into general
agreements regarding netting (ISDAs) with all of its counterparties
for transactions in derivative instruments. Financial credit risk is also
reduced in that liquid funds shall primarily be used to reduce outstanding liabilities, which limits the volume of outstanding surplus
liquidity.
Customer credit risk Gunnebo has formulated a credit policy regulating the management of customer credit, which partly encompasses decision-making levels for granting credit limits. Each subsidiary is
responsible for checking and controlling credit risk with customers,
within given limits. The rules applicable for issuing credit locally are
documented in a local credit policy regulating credit limits, terms of
payment and collection procedures. Lease agreements and customer
financing packages shall be approved by Gunnebo Treasury AB. For
further information, see Note 18, “Accounts receivable”.
Sensitivity Analysis
Profit is affected by changes in certain factors of importance to the Group, as explained below. The calculation is made on the basis of the Group’s structure at the
year-end and assuming all other factors remain unchanged.
46 Change
Effect
Selling prices
A 1% change in the selling price…
…would affect income and operating profit by
approximately MSEK 56.
Labour cost
A 1% change in labour costs, including social security
charges…
…would affect operating profit by approximately
MSEK 19.
Steel prices
A general change in steel prices of 10%…
... would affect profit by around MSEK 30 for the
subsequent 12 months.
Currencies
A 10% change in the value of the SEK…
... would affect operating profit by approximately
MSEK 42 in total. Of this, MSEK 27 would be netted
transaction exposure, without taking the Group’s
forward cover into account. The remaining MSEK 15
is attributable to translation exposure.
Interest expenses
On the basis of the average fixed interest term of the
Group’s total loans at the year-end, a simultaneous
change of one percentage point in all of Gunnebo’s
loan currencies…
…would affect profit by approximately MSEK 7 for the
subsequent 12 months.
Risk Management within the Gunnebo Group
Category of Risk
Risks to Gunnebo
Risk Management
Comments 2014
Market risk
Changes in the economy and demand, customers’ investment plans and production levels.
Monthly reports, good distribution of risk in
issues relating to products, customers and market
coverage.
There has been stabilisation on the European
market. The Group has continued to shift the
business to markets with growth.
Raw materials risk
Increased costs for input goods and components, shortage of input goods and components, price increases cannot be passed on to
customers.
Steel is purchased through index-based contracts,
purchasing activities are co-ordinated by a central
purchasing function, people are assigned responsibility for categories in particularly important areas
of purchasing.
The price of steel remained relatively stable in
2014 and even fell on some markets. Further
information about the Group’s material purchases is provided on page 32.
Production risk
Disruptions and capacity shortages in the
Group’s own units or with subcontractors,
environmental impact.
Programme for identifying and evaluating risks in
the Group’s own units and with subcontractors,
environmental certification and environmental risk
analyses.
No significant disruptions or incidents were
reported in 2014.
Integration problems, increased costs, writedown of goodwill.
Group-wide function for acquisitions, instructions
and guidelines for the acquisition process (evaluation, implementation, integration).
The Group’s acquisitions in 2014 are reported
in the Board of Directors’ report and in Note 30,
“Acquisition of operations”.
Legal risks
Financial risks in customer and supplier contracts resulting from unbalanced agreements,
disputes.
Group-wide policies and guidelines, systems with
standard agreements, reporting of disputes to the
legal affairs department.
At the end of 2014, there were not deemed to be
any disputes that could entail a negative impact
on the Group’s results and financial position.
Insurable risks
Physical damage to the Group’s insurable
assets and interests.
Extensive Group-wide insurance programme, programme for identifying and evaluating the risk of
physical damage at the production plants.
The Group’s insurance protection is deemed
sufficient to run the operation.
Financial counterparty risk
Gunnebo is exposed to its counterparties’ solvency through loans, lease agreements, sales
agreements, bank balances and derivatives.
The Group’s exposure is regulated in the finance
policy, risk and exposure are controlled and minimised on an ongoing basis.
No counterparty losses in 2014.
Liquidity
Gunnebo has some degree of a seasonal cycle,
which affects cash flow.
The finance policy stipulates that a financial contingency of MSEK 350 must always be retained via a
combination of cash and credit agreements.
An extension of the financing agreements
was signed in February 2014, now maturing in
February 2019, the financial contingency was
maintained throughout the year.
Interest rate levels
The Group is a net borrower, which results in
exposure to changes in interest rates.
The Group’s finance policy stipulates that a maximum of 60% of the outstanding volume of borrowing can be hedged with interest derivatives,
the average term of which must not exceed 36%
months.
The net interest expense has been kept down
through continued low market interest rate
levels and market terms for the new financing.
Increased hedge rate to securely maintain
Exchange rates
A considerable proportion of income/costs
and assets/liabilities are in foreign currencies,
which gives rise to exchange rate effects.
Active monitoring and, in some cases, hedging of
exposure, proceeding both from transactions and
equity.
The geographical spread of the business helps
balance currency exposure.
Financial Reporting
Board of Directors’ Report
The Board and President of Gunnebo AB (publ), company registration number 556438-2629,
hereby submit the Annual Report and consolidated accounts for the 2014 financial year.
Gunnebo is an international security group with an annual turnover
of approximately MSEK 5,600 and around 5,700 employees. The
Group offers effective, innovative security solutions in bank security,
cash handling, secure storage, entrance security and security-related
services to customers around the globe.
Order intake and net sales
The Group’s order intake amounted to MSEK 5,433.1 (5,513.8).
Organically, order intake decreased by 5%.
Net sales increased by MSEK 286.0 to MSEK 5,556.5 (5,270.5).
Organically, sales increased by 2%.
FINANCIAL RESULTS
Operating profit increased to MSEK 351.8 (222.2) and the operating
margin to 6.3% (4.2%). Currency effects had a marginal impact on the
figures.
The divestment of Fichet-Bauche Télésurveillance in June 2014 resulted in a capital gain of MSEK 73.4, which is entered under operating
profit. Restructuring costs, along with other expenses of a non-recurring nature, burdened the result by MSEK 87.9 (84.0). The majority of
these costs can be attributed to staff cuts and other structural measures in Region EMEA. Operating profit excluding income and expenses
of a non-recurring nature of MSEK –14.5 (–84.0) amounted to MSEK
366.3 (306.2), which equates to an operating margin of 6.6% (5.8%).
Higher sales improved the result by approximately MSEK 18.
Compared to last year, capacity adaptations and other savings have
brought fixed costs down by approximately MSEK 48, and this helped
to improve the operating margin. In addition, further initiatives to
expand the operation have been carried out on growth markets.
Net financial items improved to MSEK –35.2 (–75.2). The high cost in
the previous year was mainly due to the write-down of financial assets
attributable to the discontinued Perimeter Protection. Group profit
after financial items amounted to MSEK 316.6 (147.0). Net profit for the
period totalled MSEK 227.3 (101.6), and earnings per share attributable
to the parent company’s shareholders were SEK 2.98 (1.29) per share.
The tax expense amounted to MSEK –89.3 (–45.4) and the tax rate
to 28.2% (30.9%). The tax rate was positively affected by non-taxable
income attributable to the divestment of Fichet-Bauche Télésurveillance, and by a more favourable composition of Group profit, with
profit improvements in countries where the Group is not yet in a tax
position.
48 ACQUISITION IN MEXICO
On August 28, 2014, Gunnebo acquired Mexican company Diseños
Inteligentes de Seguridad S.A de C.V. (Dissamex), which provides
service and installation services in electronic security, primarily to
banks. The acquired operation has annual sales of approximately
MSEK 45. The purchase sum is expected to total MSEK 32.
Acquisition in the UK
On October 10, 2014 Gunnebo acquired British company Clear Image
MMS Ltd, which operates in electronic security. The acquired operation has annual sales of approximately MSEK 60. The purchase sum
totalled MSEK 36.
Capital expenditure and depreciation/amortisation
Investments made during the period in intangible assets and in property, plant and equipment totalled MSEK 77.7 (71.8). Depreciation/
amortisation amounted to MSEK 87.7 (84.2).
Product Development
Group expenditure on developing existing product programmes, and
on developing brand new products in existing or new market segments, totalled MSEK 69.2 (73.7). Of this, MSEK 12.2 (14.8) was capitalised in the balance sheet during the year.
Cash flow
Cash flow from operating activities improved compared to the previous year and amounted to MSEK 271.3 (210.8), primarily as a result of
freeing up working capital, and also higher operating profit. Cash flow
from investing activities amounted to MSEK –14.7 (–74.7), and this was
compensated for by MSEK 76.9 during the year with the sale amount
from divesting Fichet-Bauche Télésurveillance.
Liquidity and financial position
The Group’s liquid funds at the end of the period amounted to MSEK
447.0 (392.0). Equity amounted to MSEK 1,694.3 (1,463.6) and the
equity ratio to 35% (34%).
The increase in equity can primarily be attributed to net profit for
the period of MSEK 227.3. Translation differences in foreign operations, reported in other comprehensive income, had a positive effect
on equity of MSEK 92.6. Dividend payments to shareholders burdened
equity by MSEK 75.9.
Net debt fell by MSEK 49.9 during the year to MSEK 1,038.6 (1,088.5),
primarily due to a strong free cash flow and the divestment of FichetBauche Télésurveillance.
The debt/equity ratio totalled 0.6 (0.7). Net debt excluding pension
commitments amounted to MSEK 613.4 (727.9).
The Group’s long-term credit framework on December 31, 2014
amounted to MSEK 1,509.9 and ensures that financing is available on
market terms until the end of February 2019.
Net sales
EMPLOYEES
2,000
MSEK
6,000
4,000
The number of employees at the end of the period was 5,670 (5,612).
The number of employees outside of Sweden at the end of the period
was 5,498 (5,432).
12
MSEK
400
The Board proposes that the 2015 AGM re-approve the current
principles for remuneration and other employment conditions for
Gunnebo’s Group Executive Team for 2015. The principles relate to the
President and other members of the Group Executive Team and apply
to employment contracts entered into after the guidelines have been
approved by the AGM and to changes in existing employment contracts made subsequently.
Gunnebo will offer the level of remuneration and terms of employment necessary to recruit and retain qualified senior executives. The
overall principles for salary and other remuneration to senior executives at Gunnebo are, therefore, that compensation shall be competitive and in line with market standards. The Group Executive Team’s
total remuneration shall consist of fixed salary, performance-related
remuneration including long-term incentive programmes, pension and
other benefits.
The fixed salary shall take into account the individual’s position,
expertise, areas of responsibility, performance and experience, and shall
normally be reviewed on an annual basis. The fixed salary shall also
France
14
Operating profit
REMUNERATION TO SENIOR EXECUTIVES
Sales by Market
13
300
200
100
12
13
14
Incl. items of a non-recurring nature
Excl. items of a non-recurring nature
2014
2013
MSEK
%
MSEK
%
19
1,030
19
1,023
USA
486
9
447
8
India
429
8
390
7
UK
328
6
255
5
Spain
238
4
232
4
Germany
232
4
251
5
Sweden
203
4
189
4
Canada
189
3
198
4
Denmark
170
3
158
3
Belgium
169
3
174
3
Indonesia
163
3
165
3
China
162
3
131
2
Italy
159
3
159
3
158
3
161
3
Other
Australia
1,441
25
1,338
27
Total
5,557
100
5,271
100
Financial Reporting
comprise the basis for calculating performance-related remuneration.
The performance-related element shall be dependent on the individual’s
achievement of predetermined, quantitative financial targets and may
not exceed 50% of the fixed salary.
The Board shall evaluate each year whether a share or share pricerelated incentive programme will be proposed at the AGM.
Pension premiums for members of the Group Executive Team living
in Sweden are paid in accordance with a defined contribution plan.
Premiums may amount to a maximum of 35% of the fixed salary,
depending on age and salary level. Members of the Group Executive
Team living outside of Sweden may be offered pension solutions that
are competitive in the country where they live, preferably premiumbased solutions. The retirement age shall be 65.
For members of the Group Executive Team living in Sweden, the
notice period is 12 months for the company and six months for the
individual. No severance pay is awarded. Members of the Group Executive Team living outside of Sweden may be offered notice periods that
are competitive in the country where they live, preferably equivalent
to the notice periods applicable in Sweden. The Board is entitled to
depart from these guidelines in individual cases if there are specific
reasons to do so. Remuneration to the management that has already
been decided but which has not fallen due for payment by the 2015
AGM comes under these guidelines, with the exception that the President is entitled to 12 months’ severance pay in the event of the employment being terminated by the company.
In conjunction with the company signing an employment contract
with a new President in 2015, the Board of Directors has used the
right decided by the AGM to deviate from the guidelines under certain
circumstances. It has therefore been agreed that the President shall
be entitled to severance pay corresponding to 12 months’ salary in
the event of the employment being terminated by the company, that
performance-related pay shall also be pensionable and that the President shall be entitled to receive pension from the age of 63.5 years.
The Board has deemed these deviations to be necessary to carry out
the recruitment. Besides the above, no deviations have been made
from the guidelines adopted by the 2014 AGM.
SHARE CATEGORY
At the end of the year, Gunnebo AB’s share capital amounted to MSEK
380.9, divided between 76,173,501 shares with a quota value of SEK 5.
All shares have one vote each and are of the same category. Each share
entitles the holder to an equal share of the company’s assets and profits. There are no restrictions on the transferability of shares.
Share data
Earnings per share after dilution were SEK 2.98 (1.29). The number of
shareholders totalled 12,000 (10,900).
Proposed dividend
The Board proposes that a dividend of SEK 1.00 (1.00) per share be paid
for the 2014 financial year.
Parent company
The Group’s parent company, Gunnebo AB, is a holding company which
has the main task of owning and managing shares in other Group companies, as well as providing Group-wide functions and services within
corporate management, business development, human resources,
legal affairs, financial control/finance, IT, quality, logistics, the environment and communication.
Net sales for the period January-December amounted to MSEK
260.1 (204.1), of which MSEK 0.0 (0.0) related to external customers.
Net profit/loss for the period amounted to MSEK 120.5 (–50.1). Group
contributions had a positive impact on net profit of MSEK 47.0 (negative impact of MSEK 90.0).
Investments in and divestments of shares and participations in
subsidiaries amounted to MSEK 0.0 (0.0) and MSEK 0.0 (0.0) respectively. Investments made in intangible assets and in property, plant and
equipment totalled MSEK 2.3 (1.4). Liquid funds at the end of the year
amounted to MSEK 0.1 (2.8).
Environmental impact
Gunnebo strives to operate its business in a way that is not damaging to
the environment, and it complies with the applicable environmental
NET SALES, OPERATING PROFIT AND OPERATING MARGIN BY REGION, MSEK
Net sales
3,644
3,474
108
–27
3.0
–0.8
Region Asia-Pacific
1,029
954
131
126
12.7
13.2
Region Americas
2014
Operating margin, %
2013
Total
50 Operating profit/loss
2014
2013
2014
2013
884
843
113
123
12.8
14.6
5,557
5,271
352
222
6.3
4.2
legislation in its businesses and processes around the world. The
Group does not operate any business that requires notification or a
licence under Swedish environmental law. For more information, see
“Environmental Management” on pages 32–33.
Risks and uncertainties
Given the international nature of its business, Gunnebo is exposed to
financial, strategic and operational risks. The financial risks are linked
to changes in interest rates, exchange rates, as well as refinancing
and counterparty risks, and primarily comprise financing risk, interest
rate risk, liquidity risk and currency risk. These risks are covered by and
regulated in the Group’s finance policy.
Strategic and operational risks mainly comprise market risks, raw
material risks, production risks and legal risks. In addition to the above
risks, the Group also continuously monitors risks relating to the environment, changes in prices, competition, technical development, new
legislation, competence supply and taxes. For more information on the
risks to which Gunnebo is exposed, see Notes 3 and 35 and the “Risk
and Sensitivity Analysis” section on pages 44–47.
Debt/equity ratio
times
1.0
0.8
0.6
0.4
0.2
12
13
14
Capital expenditure and depreciation
MSEK
120
90
60
30
12
13
14
Capital expenditure
Depreciation excl. goodwill
The Corporate Governance Report (pages 34–40), constitutes a separate document from the Annual Report under the Annual Accounts
Act, Chapter 7, §8.
Future prospects
Gunnebo is making no comment on prospects for 2015.
No. of employees at year-end
Number
Events after the closing day
No significant events have occurred since the closing day, except that
Henrik Lange has been appointed President and CEO.
6,000
4,500
3,000
1,500
12
13
14
Total
Balance sheet total and equity
MSEK
5,000
4,000
3,000
2,000
1,000
11
12
13
14
Balance sheet total
Of which equity
Financial Reporting
Definitions
CAPITAL EMPLOYED
Contents
Total assets less interest-free provisions and liabilities.
53
CAPITAL TURNOVER RATE
Group Statement of Comprehensive
Income
53
54
56
57
58
Net sales in relation to average capital employed.
DEBT/EQUITY RATIO
Net debt in relation to equity.
DIVIDEND YIELD
Dividend in relation to listed price on December 31.
EARNINGS PER SHARE
Parent Company Statement of
Comprehensive Income58
59
Profit after tax attributable to the parent company’s
shareholders divided by the average number of shares.
61
62
EQUITY PER SHARE
Notes
63
Equity attributable to the shareholders of the parent
company divided by the number of shares at the end
of the period.
87
Auditor’s Report
88
EQUITY RATIO
Equity as a percentage of the balance sheet total.
FREE CASH FLOW
Cash flow from operating activities and investing
activities excluding acquisitions and divestments.
FREE CASH FLOW PER SHARE
Free cash flow divided by average number of shares in
issue after dilution.
GROSS MARGIN
Gross profit as a percentage of net sales.
INTEREST COVERAGE RATIO
Profit after financial items plus interest costs, divided
by interest costs.
NET DEBT
Interest-bearing provisions and liabilities less liquid
funds and interest-bearing receivables.
OPERATING MARGIN
Operating profit as a percentage of net sales.
ORGANIC GROWTH
Growth in net sales, or order intake, adjusted for acquisitions, divestments and exchange rate effects.
P/E RATIO
Listed price on December 31 divided by earnings per
share after dilution.
PROFIT MARGIN
Profit after financial items as a percentage of net sales.
RETURN ON CAPITAL EMPLOYED
Operating profit plus financial income as a percentage
of average capital employed.
RETURN ON EQUITY
Profit for the year as a percentage of average equity.
MSEK
Net sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Share of profit of associated companies
Other operating income
Other operating expenses
Operating profit/loss
Financial income and expenses
Interest income
Other financial income
Interest expenses
Other financial expenses
Total financial income and expenses
Note
2014
2013
5
5,556.5
–3,911.0
1,645.5
5,270.5
–3,688.7
1,581.8
–738.2
–646.1
0.4
95.7
–5.5
351.8
–739.6
–629.1
–0.1
21.5
–12.3
222.2
11.6
2.1
–37.0
–11.9
–35.2
11.3
1.2
–33.8
–53.9
–75.2
316.6
147.0
–89.3
227.3
–45.4
101.6
226.2
1.1
227.3
98.1
3.5
101.6
33
16
6
7
5, 8, 9, 10, 22, 27, 32
11
11
Profit/loss after financial items
Taxes
Profit/loss for the year
12
Of which attributable to:
Parent company shareholders
Holdings with a non-controlling interest
Earnings per share before dilution, SEK
13
2.98
1.29
13
2.98
1.29
2014
2013
227.3
101.6
–35.5
5.5
–30.0
–21.0
5.2
–15.8
93.2
5.1
–7.1
91.2
–80.9
–3.0
2.1
–81.8
Total other comprehensive income
61.2
–97.6
Comprehensive income for the year
288.5
4.0
Of which attributable to:
Parent company shareholders
Total
286.8
1.7
288.5
2.7
1.3
4.0
Group Statement of Comprehensive Income
MSEK
Note
Profit/loss for the year entered in the income statement
Other comprehensive income during the year
Items which will not be reversed to profit
Actuarial gains and losses
Tax relating to actuarial gains and losses
Total items which will not be reversed to profit
Items which may be reversed to profit
Translation differences in foreign operations*
Hedging of net investments
Cash flow hedges
Total items which may be reversed to profit
21
21
21
*Of which MSEK 0.6 (–2.2) refers to holdings with a non-controlling interest.
Financial Reporting
assets, MSEK
Note
2014
2013
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
14
14
1,490.0
184.6
1,674.6
1,322.4
172.1
1,494.5
Property, plant and equipment
Buildings and land
Machinery
Equipment
Construction in progress
Total property, plant and equipment
15
15
15
15
119.6
99.5
69.6
15.7
304.4
129.6
86.6
80.1
7.4
303.7
16
9.6
0.3
6.1
16.0
10.1
0.3
6.0
16.4
12
339.2
306.9
2,334.2
2,121.5
17
694.2
609.2
18
1,125.0
62.6
76.3
85.9
1,349.8
1,038.5
54.3
65.2
54.2
1,212.2
447.0
392.0
Total current assets
2,491.0
2,213.4
TOTAL ASSETS
4,825.2
4,334.9
Non-current assets
Financial assets
Holdings in associated companies
Other shares and participations
Other long-term receivables
Total financial assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Current receivables
Accounts receivable
Current tax receivables
Other receivables
Prepaid expenses and accrued income
Total current receivables
Liquid funds
54 19
20
EQUITY AND LIABILITIES, MSEK
Equity
Share capital (76,173,501 shares with a quota value of SEK 5)
Other contributed capital
Reserves
Retained earnings
Total equity attributable to parent company shareholders
Note
2014
2013
21
380.9
987.6
–170.2
472.0
1,670.3
379.6
980.6
–260.8
347.7
1,447.1
24.0
1,694.3
16.5
1,463.6
66.0
425.2
958.0
1,449.2
64.1
360.6
848.8
1,273.5
659.5
37.0
221.5
556.0
108.5
99.2
1,681.7
555.3
34.3
167.1
472.3
277.1
91.7
1,597.8
4,825.2
4,334.9
—
184.1
—
146.5
Total equity
Long-term liabilities
Deferred tax liabilities
Pension commitments
Borrowings
Total long-term liabilities
Current liabilities
Accounts payable
Current tax liabilities
Other liabilities
Accrued expenses and deferred income
Borrowings
Other provisions
Total current liabilities
12
22
24
25
24
23
TOTAL EQUITY AND LIABILITIES
Pledged assets
Contingent liabilities
55
Financial Reporting
Attributable to parent company shareholders
MSEK
Other
Share contribucapital ted capital
Opening balance Jan 1, 2014
379.6
New share issue*
Acquisitions through non-cash issue**
Dividend
Total transactions with owners
Closing balance Dec 31, 2014
Holdings
with a noncontrolling
interest
Total
Total
equity
Reserves
Retained
earnings
980.6
–260.8
347.7
1,447.1
16.5
1,463.6
—
—
—
—
—
—
—
90.6
90.6
226.2
–30.0
196.2
226.2
60.6
286.8
1.1
0.6
1.7
227.3
61.2
288.5
1.3
—
—
1.3
7.0
—
—
7.0
—
—
—
—
—
4.0
–75.9
–71.9
8.3
4.0
–75.9
–63.6
—
5.8
—
5.8
8.3
9.8
–75.9
–57.8
380.9
987.6
–170.2
472.0
1,670.3
24.0
1,694.3
Holdings
with a noncontrolling
interest
Total
Total
equity
Attributable to parent company shareholders
MSEK
Other
Share contribucapital ted capital
379.3
New share issue*
Dividend
Reserves
Retained
earnings
979.0
–181.2
341.3
1,518.4
15.2
1,533.6
—
—
—
—
—
—
—
–79.6
–79.6
98.1
–15.8
82.3
98.1
–95.4
2.7
3.5
–2.2
1.3
101.6
–97.6
4.0
0.3
—
0.3
1.6
—
1.6
—
—
—
—
–75.9
–75.9
1.9
–75.9
–74.0
—
—
—
1.9
–75.9
–74.0
379.6
980.6
–260.8
347.7
1,447.1
16.5
1,463.6
*Refers to issue of shares and warrants to participants in incentive programmes.
**In the acquisition of Diseňos Inteligentes de Seguridad S.A de C.V, part of the purchase sum was paid in the form of newly issued shares in Gunnebo Mexíco S.A. de C.V. The transaction also
resulted in an equity shift between the parent company’s shareholders and shareholders with a non-controlling interest.
MSEK
Note
2014
2013
29
28
351.8
39.8
–32.6
–112.6
222.2
112.2
–31.4
–85.3
246.4
217.7
Cash flow from changes in working capital
Change in inventories
Change in operating receivables
Change in operating liabilities
Total change in working capital
–33.0
9.5
48.4
24.9
–26.2
–23.0
42.3
–6.9
Cash flow from operating activities
271.3
210.8
–26.4
–51.3
29.5
–43.8
76.9
0.4
–14.7
–23.7
–48.1
5.5
–8.4
—
—
–74.7
0.0
–180.5
8.3
–75.9
–248.1
–2.0
14.5
1.9
–75.9
–61.5
8.5
74.6
392.0
46.5
349.6
–32.2
447.0
392.0
OPERATING ACTIVITIES
Adjustment for items not included in cash flow etc.
Net financial items affecting cash flow
Taxes paid
before changes in working capital
INVESTING ACTIVITIES
Capital expenditure on intangible assets
Capital expenditure on property, plant and equipment
Sales of non-current assets
Acquisition of operations
Divestiture of operations
Divestiture of participations in associated companies
Cash flow from investing activities
14
15
30
31
FINANCING ACTIVITIES
Change in interest-bearing receivables
Change in interest-bearing liabilities
New share issue
Dividend
Cash flow from financing activities
Cash flow for the year
Liquid funds at the beginning of the year
Translation differences in liquid funds
Liquid funds at year-end
57
Financial Reporting
MSEK
Net sales
Profit/loss from participations in Group companies
Interest income
Interest expenses
Total financial income and expenses
Note
2014
2013
52
37, 47, 49, 50, 52
260.1
–203.9
56.2
204.1
–147.1
57.0
38
38
38
38
49.0
0.2
–18.1
—
31.1
–0.3
0.7
–14.1
–0.1
–13.8
87.3
43.2
47.0
–13.8
120.5
–90.0
–3.3
–50.1
Appropriations
Taxes
39
40
Parent Company Statement of Comprehensive Income
MSEK
Profit/loss for the year entered in the income statement
Other comprehensive income, net of tax
58 2014
2013
120.5
—
120.5
–50.1
—
–50.1
ASSETS, MSEK
Note
2014
2013
Intangible assets
Total intangible assets
41
6.1
6.1
5.7
5.7
Equipment
Total property, plant and equipment
42
2.1
2.1
2.4
2.4
Financial assets
Shares in subsidiaries
Deferred tax assets
43
40
1,595.3
120.3
1,715.6
1,595.3
130.7
1,726.0
1,723.8
1,734.1
18.7
5.2
3.3
27.2
134.4
2.0
4.0
140.4
0.1
2.8
27.3
143.2
1,751.1
1,877.3
Non-current assets
Total non-current assets
Current assets
Current receivables
Receivables from Group companies
Other receivables
Total current receivables
Liquid funds
Total current assets
TOTAL ASSETS
59
Financial Reporting
Parent Company Balance Sheets cont.
EQUITY AND LIABILITIES, MSEK
Note
2014
2013
Restricted equity
Share capital (76,173,501 shares with a quota value of SEK 5)
Statutory reserve
Total restricted equity
380.9
539.3
920.2
379.6
539.3
918.9
Unrestricted equity
Share premium reserve
Retained earnings
Total unrestricted equity
448.3
–4.4
120.5
564.4
441.3
121.6
–50.1
512.8
1,484.6
1,431.7
10.1
216.3
1.7
35.9
2.5
266.5
13.1
406.0
2.8
21.2
2.5
445.6
1,751.1
1,877.3
—
1,317.5
—
1,310.3
Equity
Total equity
Current liabilities
Accounts payable
Liabilities to Group companies
Other liabilities
Other provisions
Total current liabilities
51
45
TOTAL EQUITY AND LIABILITIES
Pledged assets
60 46
Restricted equity
MSEK
New share issue*
Dividend
Share capital
Statutory
reserve
379.6
539.3
441.3
71.5
1,431.7
—
—
—
—
—
—
—
—
—
120.5
—
120.5
120.5
—
120.5
1.3
—
1.3
—
—
—
7.0
—
7.0
—
–75.9
–75.9
8.3
–75.9
–67.6
380.9
539.3
448.3
116.1
1,484.6
Unrestricted equity
Retained
earnings and
profit/loss for
Share premium
the year
reserve
Total equity
Restricted equity
MSEK
New share issue*
Dividend
Unrestricted equity
Retained
earnings and
profit/loss for
Share premium
the year
reserve
Total equity
Share capital
Statutory
reserve
379.3
539.3
439.7
197.5
1,555.8
—
—
—
—
—
—
—
—
—
–50.1
—
–50.1
–50.1
—
–50.1
0.3
—
0.3
—
—
—
1.6
—
1.6
—
–75.9
–75.9
1.9
–75.9
–74.0
379.6
539.3
441.3
71.5
1,431.7
*Refers to issue of shares and warrants to participants in incentive programmes.
Financial Reporting
MSEK
Note
2014
2013
56.2
2.2
31.2
–3.4
57.0
7.2
–8.5
–3.3
86.2
52.4
Change in operating receivables
Change in operating liabilities
Total change in working capital
113.2
8.5
121.7
–73.5
–1.5
–75.0
207.9
–22.6
–2.2
–0.1
–2.3
–1.4
—
–1.4
–50.7
—
–90.0
8.3
–75.9
–208.3
33.1
67.0
—
1.9
–75.9
26.1
–2.7
2.1
2.8
0.1
0.7
2.8
OPERATING ACTIVITIES
Taxes paid
48
INVESTING ACTIVITIES
Capital expenditure on intangible assets
Capital expenditure on property, plant and equipment
Cash flow from investing activities
41
42
FINANCING ACTIVITIES
Change in interest-bearing liabilities
Group contributions received
Group contributions paid
New share issue
Dividend
Cash flow from financing activities
Cash flow for the year
Liquid funds at the beginning of the year
Liquid funds at year-end
Notes
Note 1
Amounts in MSEK unless otherwise stated
General information
Gunnebo AB (publ) is a Swedish public limited company registered with the
Swedish Companies Registration Office under the company registration number
556438-2629. The Board has its registered office in Göteborg Municipality in
Sweden.
The Group’s main activities are described in the Board of Directors’ Report and in
the notes to this Annual Report. The company’s shares are listed on the NASDAQ
Stockholm’s Mid Cap list.
The consolidated accounts for the financial year ending December 31, 2014 were
approved by the Board on March 5, 2015 and will be submitted to the Annual
General Meeting on April 15, 2015 for adoption.
Note 2
Summary of important accounting principles
Foundations for preparing the statements
This Annual Report has been prepared in accordance with the Swedish Annual
Accounts Act and the International Financial Reporting Standards (IFRS), as
adopted by the EU. The Annual Report also contains additional information in
accordance with the recommendation of the Swedish Financial Reporting Board,
RFR 1 Supplementary Accounting Regulations for Groups, which specifies information required in addition to the IFRS information in accordance with the provisions of the Swedish Annual Accounts Act.
The consolidated accounts have been prepared in accordance with the cost
method, with the exception of financial instruments measured at fair value.
Reports prepared in compliance with IFRS require the use of accounting estimates. Furthermore, the management is required to make certain assessments
upon application of the company’s accounting principles. The areas which
include estimates and assessments of significant importance to the consolidated accounts are given in Note 4.
New and amended accounting principles
As of January 1, 2014, Gunnebo applies the following new standards and
amendments:
Amendment to IAS 32 Financial Instruments: Presentation: The amendments
regard offsetting financial assets and financial liabilities and clarify how the offsetting rules in IAS 32 are to be applied. The amendments have not had any
material effect on the Group’s accounts.
IFRS 10 Consolidated Financial Statements replaces the parts of IAS 27 Consolidated and Separate Financial Statements that regulate when and how consolidated financial statements are to be prepared. Controlling interest plays a
key role in the consolidation requirement of IFRS 10 irrespective of the character
of the investment entity.
The definition of controlling interest is based on the following sub-components: influence over the investment entity, right to variable returns from the
investment entity, and ability to use the influence over the investment entity to
affect its return. Furthermore, IFRS 10 contains guidance on how a company
should apply the principle of controlling interest in a number of different situations.
IFRS 11 Joint Arrangements supersedes IAS 31 Interests in Joint Ventures and
SIC-13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers.
Joint arrangements are categorised as shared operations or a joint venture in
IFRS 11 and the parties’ rights and obligations as set out in agreements are crucial to the classification. IFRS 11 also states that the equity interest method
shall be used when recognising participations in joint ventures. The proportional method is, therefore, no longer permitted for joint ventures.
IFRS 12 Disclosure of Interests in Other Entities contains requirements on
disclosures regarding subsidiaries, joint arrangements, associates or structured companies which are not consolidated. The aim of the new disclosure
requirements is that companies should submit information to help users of its
financial statements to assess the risks attributable to holdings in other
entities, and the influence these holdings have on the company’s financial
s tatements.
The above amendments to IFRS 10, IFRS 11 and IFRS 12 have not had any
effect on Gunnebo’s financial position or results. This is because Gunnebo is not
a part-owner of any company that is affected by the new rules on joint arrangements, and the new definition of controlling interest in IFRS 10 has not resulted
in any changes regarding which companies are included in the consolidated
accounts.
Gunnebo Annual Report 2014 Other new and amended standards have not had any effect on the Group’s
financial statements.
Standards, interpretations and amendments that have been issued but have
not yet come into force or been adopted by the EU
On preparing the consolidated accounts as at December 31, 2014, several standards, interpretations and amendments have been published which have not yet
come into force or been adopted by the EU. The Group has still not begun to
apply these new, amended standards and interpretations. The following is a
preliminary assessment of the effect the introduction of these new, amended
standards and interpretations may have on Gunnebo’s financial statements:
IFRS 15 Revenue from Contracts with Customers replaces IAS 18 Revenue
and IAS 11 Construction Contracts and shall be applied from January 1, 2017.
IFRS 15 entails new rules for recognising revenue that comprises income arising from contracts with customers, with the exception of lease agreements,
financial instruments and insurance contracts. With IFRS 15, the fundamental
principle for revenue recognition is that income is recognised when all risks and
benefits associated with a good or service pass to the customer in exchange for
remuneration for this good or service.
The new standard may have consequences for the recognition of, for example, service agreements, long-term contracts and sales transactions with elements of goods and/or services. The corporate management is currently assessing how IFRS 15 will impact on the Group’s financial statements when it is
applied for the first time.
IAS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement. The latest version of the standard was issued on July 24,
2014 and supersedes the previous versions, which were issued in phases. IFRS 9
contains new requirements for financial instruments regarding recognition and
measurement, derecognition, impairment and hedge accounting. The standard,
which has not yet been adopted by the EU, shall be applied from January 1,
2018.
IFRS 9 requires that all recognised financial assets covered by IAS 39 shall
henceforth be measured at amortised cost, fair value via the income statement
or fair value via other comprehensive income. Financial assets held with the aim
of collecting the contracted cash flows, and instruments that only have contracted flows in the form of payments of principal and interest on the principal
amount outstanding, shall be measured at amortised cost at the end of the
reporting period. If such instruments are held with the aim of mainly collecting
contractual cash flows, measurement at fair value via other comprehensive
income may be possible. Other financial assets shall be valued at fair value at
the end of the reporting period.
IFRS 9 also includes a new model for impairments that entail a transfer from
an incurred loss model to an expected loss model. In principle the change
means that all assets recognised at amortised cost are divided into three categories. A 12-month expected credit loss shall be earmarked for the first category
into which all instruments are placed the first time they are recorded. The provision for assets assigned to the second category shall instead be based on lifelong expected loss. The third category is for instruments where an actual event
means that there is objective evidence of impairment.
The most significant effect of IFRS 9 in terms of recognition and measurement of financial liabilities (identified at fair value via the income statement)
relates to changes in fair value due to changes in credit risk. According to IFRS 9
the change in fair value for such financial liabilities shall be recognised in other
comprehensive income to the extent that the change relates to changes in
credit risk. This applies provided that recognition of the effects of the change in
the liability’s credit risk in other comprehensive income does not result in a misleading matching of the income statement. Furthermore, changes in fair value
relating to credit risk shall not be reclassified to the income statement in a subsequent period. This is a change compared with IAS 39 which stipulates that
changes in fair value relating to financial liabilities (identified at fair value via
the income statement) shall be recognised in their entirety in the income statement.
IFRS 9 also includes new rules on hedge accounting. It is, however, possible to
choose to continue to apply the rules on hedge accounting in the current IAS 39
instead of the new rules introduced in IFRS 9. (The IASB, however, intends to
review this freedom of choice in connection with its work on macro hedging.)
The three hedging categories cash flow hedge, fair value hedge and hedge of
a net investment in a foreign operation remain in IFRS 9. Significant changes
have however been introduced regarding the application of hedge accounting,
and in particular the scope of which types of risk it is possible to hedge has been
63
Financial Reporting
Note 2 cont.
extended to non-financial items. Furthermore, IFRS 9 introduces a more principle-based approach to measuring the effectiveness of a hedge transaction compared with the current rules in IAS 39.
In summary, it is the corporate management’s assessment that the application of IFRS 9 may influence the Group’s financial statements. However, the corporate management has not carried out a detailed analysis of the effects of
applying IFRS 9, which is why it is not currently possible to quantify the effects.
Consolidated accounts
The consolidated accounts relate to Gunnebo AB and those companies in which
the company directly or indirectly owns shares controlling more than 50% of the
votes, or over which the company exercises control in some other way.
The consolidated accounts have been drawn up in accordance with the
acquisition method, whereby the Group equity includes the parent company’s
equity, equity in holdings belonging to subsidiaries with a non-controlling interest at the time of acquisition, and subsidiary companies’ equity generated after
acquisition.
In the case of corporate acquisitions where the total of the purchase sum,
any holdings with a non-controlling interest and fair value at the time of the
acquisition of former shareholdings exceeds the fair value at the time of acquisition of identifiable acquired net assets, the difference is recognised as goodwill in the report on financial position. If the difference is negative, it is recognised as a gain on an acquisition at a low price directly as income after
reviewing the difference. Intra-Group transactions and balance items as well as
non-realised gains on transactions between Group companies are eliminated.
For every corporate acquisition, holdings with a non-controlling interest in
the acquired company are measured either at fair value, or at the value of the
percentage of the holding with a non-controlling interest of the acquired company’s identifiable net assets.
With gradual acquisitions, the former equity percentages in the acquired
company are re-measured at their fair value at the time of acquisition (ie when
a controlling interest is obtained). Any gain or loss is reported as income.
Accounting treatment of associated companies
In the accounts, associated companies are companies that are not subsidiaries
but in which Gunnebo has a significant but not controlling interest, which generally entails a shareholding or participation corresponding to between 20% and
50% of the number of votes. Shareholdings in associated companies are recognised using the equity interest method. This means that the cost of shares,
adjusted to take into account the Group’s share of the associated companies’
result, is entered in the Group’s balance sheet, under financial assets, after
deduction for dividend received. The Group’s share of the associated company’s
result after tax is recognised in the income statement under Share of profit of
associated companies. The Group’s carrying amount for holdings in associated
companies includes goodwill as identified on acquisition, net of write-downs.
Translation of foreign currencies
a) Functional currency and presentation currency
Items in the financial statements for the various Group units are measured in the
currency used in the economic environment in which each company primarily
operates (functional currency). In the consolidated accounts the Swedish krona is
used, which is the parent company’s functional and presentation currency.
b) Transactions and balance sheet items
Transactions in foreign currencies are translated into the functional currency
using the exchange rates in force on the transaction date. Exchange rate gains
and losses arising upon payment of such transactions and upon translating
monetary assets and liabilities in foreign currencies at the closing day exchange
rate are recognised in the income statement. The exceptions are transactions
comprising hedges which fulfil the conditions for hedge reporting of cash flows
or net investments, whereby gains/losses are recognised in other comprehensive income. The equivalent also applies for monetary items which form part of
a net investment in a foreign operation.
c) Group companies
The income statement and balance sheet of all Group companies with a functional currency different to the presentation currency are retranslated into the
Group’s presentation currency as follows:
(i) assets and liabilities for each of the balance sheets are translated at the
closing day rate;
64 (ii)income and expenses for each of the income statements and statements
of comprehensive income are translated at the average exchange rate (if
this average exchange rate is not a reasonable approximation of the accumulated effect of the rates in effect on the transaction date, income and
expenses are translated on the transaction date);
(iii)all currency differences which arise are recognised in other comprehensive
income. Upon consolidation, currency differences which arise as a result of
translating net investments in foreign operations and of borrowing and
other currency instruments identified as hedges of such investments, are
recognised in other comprehensive income. On divestment of a foreign
operation, such currency differences are recognised in the income statement along with the gain/loss entailed by the transaction. Goodwill and
adjustments of fair value arising upon acquisition of a foreign operation
are treated as assets and liabilities in the operation in question, and are
translated at the closing day rate.
Discontinued operations
A discontinued operation is a part of a company that has either been divested or
is classified as being held for sale and constitutes a considerable, independent
business line or an operation run within a geographical region. The profit for a
discontinued operation is recognised separately from continuing operations in
the income statement.
Derivative instruments
The Group applies accounting standard IAS 39, Financial Instruments: Recognition
and Measurement.This means that all derivative instruments are recognised in the
balance sheet at fair value. Changes in value relating to derivative instruments are
recognised in the income statement except where the derivative instrument is a
hedging instrument in a cash flow hedge or in a hedge of a net investment in a
foreign company. In these cases the effective portion of the change in value
regarding the derivative instrument is recognised via other comprehensive income
and is accumulated under equity until the point where the hedged transaction has
an effect on profit. With regard to the derivative instruments relating to hedging
of fair value, the changes in value both from derivative instruments and the
hedged item are recognised in the income statement, where they neutralise one
another to the extent that the hedge is effective.
Assets in this category mainly comprise long-term financial receivables and they
are initially recognised at fair value including transaction costs. After that they
are recognised at amortised cost with the application of the effective interest
method.
Inventories
Inventories are measured at the lower of cost and net selling price in accordance
with the first-in first-out principle (FIFO). The value of inventories includes an
attributable share of indirect costs.
Accounts receivable
A reserve for doubtful receivables is made when it is likely that the Group will not
receive the amounts due in accordance with the receivables’ original terms. The size
of the reserve comprises the difference between the assets’ carrying amount and
the present value of assessed future cash flows.
Liquid funds
Liquid funds include cash, bank deposits and other short-term investments which
mature within three months of the date of acquisition..
Income tax
The stated income tax comprises tax that is to be paid or received for the financial year in question, adjustments to previous years’ taxes and changes in
deferred tax. All tax liabilities and assets are measured at nominal amounts in
accordance with the tax rules and at the tax rates that have been decided or
announced and will almost certainly be approved.
Tax effects relating to items in the income statement are also recognised in
the income statement. The tax effects of items recognised under other comprehensive income are also reported under other comprehensive income and accumulated under equity. Deferred tax is calculated based on the difference
between the tax written-down value and the carrying amount of assets and liabilities (temporary differences), and on tax loss carry-forwards. Deferred tax is
also calculated on the basis of the unrealised result of loans and forward con-
tracts entered into to hedge the net assets of foreign subsidiaries. The change in
the item is recognised under other comprehensive income and accumulated
under equity. Deferred tax receivables attributable to loss allowances are only
reported if it is probable that the deduction can be netted against a surplus in
future taxation.
Pension commitments
IAS 19 is applied in the reporting of pensions, healthcare benefits and other
employee benefits after the period of employment. The recommendation
makes a distinction between defined contribution and defined benefit pension
plans. Defined contribution pension plans are defined as plans where the company makes pre-determined payments to a third party and has no other commitment once the premiums have been paid. The payments made in exchange
for the employee carrying out services for the company are expensed in the
period in which those services are carried out.
Other plans are defined benefit plans in which the commitments remain
within the Group. These commitments and plan-related costs regarding
employment during the current period are based on actuarial calculations in
accordance with the projected unit credit method. External actuaries are
engaged for these calculations and the method allocates the cost for pensions
as the employees carry out services which increase their right to future remuneration. The actuarial assumptions used to calculate the commitments and
costs vary with the economic factors that reflect conditions in the countries
where the defined benefit plans are located. The discount rate equates to the
interest on first-class corporate bonds or government bonds, the duration of
which corresponds to the average term of the obligations.
The Group’s defined benefit plans are either non-funded or funded externally. Provisions for non-funded plans in the balance sheet comprise the present
value of the defined benefit commitments.
As regards the funded plans, the plan assets of the plans are separated from
the Group’s assets in externally managed funds. Liabilities or assets recognised
in the balance sheet relating to funded plans represent the amount by which
the market value of the plan assets exceeds or falls short of the present value of
the defined benefit commitments. However, a net asset is only recognised to
the extent that it represents future financial benefits which the Group can utilise, for example in the form of reduced contributions in the future or repayment of funds paid into the plan. When it is not possible to utilise such surpluses, they are not recognised but presented in the notes.
Actuarial gains or losses arise in the event of changes in actuarial assumptions and differences between actuarial assumptions and the outcome in reality. Changes to expected life span, pay and the discount rate are examples of
amended assumptions which could give rise to actuarial gains and losses. Actuarial gains and losses are recognised in their entirety under other comprehensive income in the period in which they arise, and they are not transferred to the
income statement in a subsequent period.
Interest expenses for pension liabilities and interest income on plan assets
are recognised net as financial income or expenses. Costs regarding employment during the current and earlier periods, reductions and rules as well as
other components in the pension cost for the year are recognised under operating profit/loss.
Some of the plans for supplementary pensions for salaried employees in
Sweden are financed through insurance premiums paid to Alecta/Collectum.
This arrangement constitutes a defined benefit plan encompassing several
employers. Alecta is currently unable to provide the information required to
report the plan as a defined benefit plan. Consequently, supplementary pensions for salaried employees insured with Alecta are stated as defined contribution plans.
Provisions
Liabilities that are uncertain in terms of amount or when they will be settled are
entered as provisions. It must also be considered likely that an outflow of
resources will be required in order to service the commitment and that the
amount can be reliably estimated. Provisions for restructuring expenses include
costs for terminating lease agreements and severance pay and are recognised
when the Group has a definite detailed restructuring plan which it has made
known to interested parties. Provisions for legal requirements are estimates of
the future cash flows required in order to settle the commitments. These estimates are based on the nature of the legal proceedings and take into account
the assessments and opinions of legal advisers with regard to their outcome.
Provisions to cover guarantee costs are estimates of warranty claims made and
have been estimated using statistics for previous claims, the expected costs of
Gunnebo Annual Report 2014 measures and the average time interval between the occurrence of a fault and a
claim being made against the company.
Accounting treatment of revenue
Revenue from the sale of goods and services is stated when an agreement has
been reached with a customer and the products have been delivered or the services provided and when all significant risks have transferred to the customer. Revenue is stated net after value added tax (VAT), discounts and returns. Intra-Group
sales are eliminated in the Group. Income for major ongoing projects of long duration on behalf of outside parties is recognised on the basis of the degree of completion, which is determined by comparing costs incurred on the closing day with
the estimated total cost.
Other operating income mainly comprises income in the form of royalties, rent,
capital gains on sales of non-current assets, and currency gains on receivables
and liabilities that are operational in character.
Goodwill
In the case of corporate acquisitions where the sum of the purchase sum, any
holdings without a controlling influence and fair value at the time of the acquisition of former shareholdings exceeds the fair value at the time of acquisition of
identifiable acquired net assets, the difference is recognised as goodwill in the
report on financial position. If the difference is negative, it is recognised as a gain
on an acquisition at a low price directly as income after reviewing the difference.
Goodwill has an indefinite useful life and is recognised at cost less accumulated
write-downs. When a business is sold, goodwill related to this business is recognised in the capital gain/loss calculation.
Other intangible assets are primarily brands, customer relations, product development costs and the costs of purchasing and developing software. Internally
developed intangible assets are only recognised as assets if an identifiable asset
has been created, it is likely that the asset will generate future financial benefits
and the cost of developing the asset can be calculated in a reliable way. If it is
not possible to recognise an internally developed intangible asset, the development costs are recognised as a cost in the period in which they arise.
Customer relations
Acquired customer relations are recognised at cost less accumulated amortisation and write-down. Customer relations have a finite useful life and amortisation is carried out linearly over the asset’s expected useful life. The amortisation
period is 5–10 years.
Brands
Acquired brands are recognised at cost less any accumulated amortisation and
write-down. Brands with an indefinite useful life are not amortised but instead
reviewed annually in terms of write-down requirement in the same way as for
goodwill. The useful life is considered indefinite if there is no foreseeable limit
to the period over which the brand is expected to be used and to generate net
cash inflows.
Expenditure on product development
Expenditure on development projects is capitalised under intangible assets to
the extent it is expected to generate future financial benefits. Other development expenditure is expensed in the income statement as it is incurred and is
included in cost of goods sold. Development expenditure previously stated as a
cost in the income statement is not capitalised as an asset in later periods. Capitalised development expenditure is written off linearly over the estimated useful life of 3–5 years.
Expenditure on software
Expenditure on software is capitalised under intangible assets if it is likely to have
economic benefits in excess of the cost after one year. Other software is recognised as a cost. Capitalised expenditure on purchasing and developing software is
written off linearly over the estimated useful life of 3–5 years.
Property, plant and equipment are recognised at cost less accumulated depreciation and any write-down. The cost includes expenses directly attributable to
bringing the asset to the location and into the condition required for it to be
65
Financial Reporting
Note 2 cont.
used for its intended purpose. Costs for improvements to the asset’s performance increase the asset’s carrying amount if the investment is expected to
generate economic benefits. Expenditure on repairs and maintenance is recognised as costs.
Property, plant and equipment are depreciated linearly over the asset’s
expected useful life down to the asset’s estimated residual value. In instances
where property, plant and equipment comprise elements with different useful
lives, each part is treated as a separate component with regard to depreciation.
The following useful lives are used for calculating scheduled depreciation:
E
quipment
• Vehicles 5 years
• Computers 3–5 years
• Other equipment 5–15 years
M
achinery 5–15 years
B
uildings and land improvements 20–50 years
Write-downs
On the occasion of each report, an assessment is made as to whether there is
any indication of a reduction in the value of the Group’s assets.
If this is the case, an estimate is made of the asset’s recoverable amount.
Goodwill and other assets with an indefinite useful life have been allocated to
the smallest cash-generating units and are subject to annual impairment
reviews even if there is no indication of a reduction in value. The need for writedown is reviewed more often, however, if there are indications of a reduction in
value. The recoverable amount is calculated as the higher of the value in use of
the asset in the business and the net selling price. The value in use consists of
the present value of all income and payments attributable to the asset during
the period it is expected to be used in the business plus the present value of the
net selling price at the end of its useful life. If the recoverable amount calculated is less than the carrying amount, the asset is written down to its recoverable amount. A previous write-down is reversed if there has been a change in the
assumptions that formed the basis for determining the asset’s recoverable
amount when it was written down and which mean that the write-down is no
longer considered necessary. The reversal of previous write-downs is reviewed
on an individual basis and is recognised in the income statement. Write-downs
of goodwill may not be reversed in any subsequent period.
Borrowings
Borrowing is initially recognised at fair value after transaction costs. Subsequently, borrowing is recognised at amortised cost and any difference between
the amount received and the repayment amount is recognised in the income
statement, distributed across the loan period, with the application of the effective interest method.
Leasing
When a lease contract means that the financial benefits are, in all essentials,
passed on to the Group, as the lessee, and the Group bears the economic risks
attributable to the leased object (known as financial leasing), the object is recognised as a non-current asset in the consolidated balance sheet. The corresponding undertaking to pay leasing charges in the future is recognised as a liability.
Leasing where a significant portion of the risks and benefits of ownership are
retained by the lessor is classified as operational leasing. Payments made during
the lease term are expensed systematically over the term of the lease.
Expenses for buying back treasury shares reduce retained earnings. If these
shares are later divested, the sale amount is recognised as an increase in
retained earnings.
PARENT COMPANY’S ACCOUNTING PRINCIPLES
The parent company has drawn up its Annual Report in accordance with the
Annual Accounts Act and the recommendation of the Swedish Financial Reporting Board, RFR 2 Accounting for Legal Entities, as well as the applicable statements of the Swedish Financial Reporting Board. RFR 2 means that in its annual
report for the legal entity, the parent company applies all IFRS and statements
approved by the EU as far as possible, within the framework of the Annual
Accounts Act and the Act on Safeguarding Pension Obligations with regard to
the relationship between accounting and taxation.
The parent company mainly applies the principles described above in relation
to the Group. The differences between the accounting principles of the Group
and the parent company are described below.
New and amended accounting principles
The changes to RFR 2 which have come into force and apply to the 2014 financial year relate to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint
Arrangements, IAS 40 Investment Property and IAS 37 Provisions, Contingent
Liabilities and Contingent Assets. None of these amendments have had any
effect on the parent company’s financial statements.
The new and amended standards and interpretations that have been issued
but come into force for the financial year beginning January 1, 2015 or later are
not expected to have a material impact on the parent company’s financial
statements when they are applied for the first time.
Shares in subsidiaries are measured at cost less any write-down. Acquisition
costs are included in the cost.
Group contributions
According to RFR 2, Group contributions paid by the parent company to subsidiaries are recognised as an increase in the carrying amount of the participations
in the receiving subsidiaries. The Swedish Financial Reporting Board has also
introduced an alternative rule which means Group contributions both received
and paid may be recognised as an appropriation. Gunnebo has decided to apply
the alternative rule which means that Group contributions received and paid are
recognised as appropriations.
Pensions
The parent company’s pension commitments have been calculated and recognised on the basis of the Act on Safeguarding Pension Obligations. The application
of the Act on Safeguarding Pension Obligations is a condition of tax relief law.
Reporting by segment
An operating segment is a part of a company that engages in business activities
from which it may earn revenues and incur expenses, whose operating results
are reviewed regularly by the company’s chief operating decision-maker and for
which discrete financial information is available. Gunnebo’s reporting of operating segments agrees with internal reporting to the chief operating decisionmaker and the definition of operating segment is also based on the management’s decision to organise the Group based on geographical areas that differ
as regards the risks they are subject to and the income they earn. The Group’s
operating segments comprise three regions: Europe, Middle East & Africa; AsiaPacific; and the Americas. The regions are consolidated according to the same
principles that apply for the Group as a whole.
Equity
Transaction costs that can be directly attributed to the issue of new shares or
options are recognised, net of tax, in equity as a reduction in the issue amount.
Notes – Group
Note 3
Financial risk management and financial instruments
Financial risk management
The financial activities are carried out in accordance with the finance policy
established by the Board, which regulates how financial risks are to be managed
and the limits within which the internal bank and Gunnebo’s subsidiaries may
operate.
Objective and policy for risk management
Financing risk
Financing risk refers to the risk that financing of the Group’s capital requirement
and refinancing of its outstanding borrowing are rendered more difficult or
more expensive. In order to limit the financing risk, the Group’s finance policy
stipulates that the total outstanding volume of borrowing must be covered by
long-term credit facilities of at least 12 months at any given time.
Interest rate risk
The interest rate risk refers to the negative effect on the Group’s income and
cash flow of a lasting change in market interest rates. The sensitivity of the
income may, however, be limited in the short term through selected interest
maturity structures and by entering into fixed-interest agreements in the form
of interest rate hedges. The Group’s finance policy stipulates that a maximum
of 60% of the outstanding volume of borrowing can be hedged with interest
derivatives, the average term of which must not exceed 36 months.
Liquidity risk
Liquidity risk refers to the risk of not having access to liquid funds or undrawn
lines of credit in order to fulfil payment obligations. The finance policy stipulates that liquid funds and unused lines of credit shall always amount to a minimum of MSEK 350.
Liquidity in the Group shall be invested with the internal bank or in local cash
pools. Gunnebo has centralised its liquidity management in cash pools in the
main European countries where it operates and in the USA. The Group uses
these cash pools to match the local subsidiaries’ surpluses and deficits in each
country and currency. Because the Group is a net borrower, the surplus liquidity
is used to reduce external liabilities.
Currency risk
Gunnebo’s accounts are prepared in Swedish kronor, but the Group has operations in a large number of countries worldwide. Consequently, the Group is
exposed to currency risks. In order to manage these risks, the Group can hedge
its currency risks within the framework of the finance policy.
Transaction exposure
Gunnebo has export income and import costs in several currencies and is therefore exposed to exchange rate fluctuations. This currency risk is called transaction exposure and has an impact on the Group’s operating result. In accordance
with the finance policy, Gunnebo does not ordinarily hedge transaction exposure. Hedging may, however, be carried out for large projects and for major
stable currency flows, provided the exposure is deemed considerable and the
hedging can take place at a reasonable cost. Any hedging should not usually run
for more than 12 months.
Translation exposure (net investments)
On consolidation, the net assets of foreign subsidiaries are translated to Swedish kronor, which can result in translation differences. In order to limit the negative effects of translation differences on Group equity, hedging may take place
through borrowing and currency derivative contracts, provided the exposure is
deemed considerable and the hedging can take place at a reasonable cost.
includes a special list of permitted counterparties and maximum credit exposure with each approved counterparty. Gunnebo has also entered into general
agreements (ISDAs) with all of its counterparties for transactions in derivative
instruments.
Liquid funds shall primarily be used to reduce outstanding liabilities, in order
to limit the volume of outstanding surplus liquidity.
Customer credit risk
Gunnebo has formulated a credit policy regulating the management of customer credit, which partly encompasses decision-making levels for granting
credit limits. Each subsidiary is responsible for checking and controlling credit
risk with customers, within given frameworks. The rules applicable for issuing
credit locally are documented in a local credit policy regulating credit limits,
terms of payment and collection procedures.
The Group’s maximum exposure to credit risk is equivalent to the book values of financial assets, as shown in the table below.
2014
Accounts receivable
Other receivables
Liquid funds
Maximum exposure to credit risk
2013
6.1
6.0
1,125.0
1,038.5
76.3
65.2
447.0
392.0
1,654.4
1,501.7
Financial instruments – Risk management during the year
Interest-bearing liabilities
Gunnebo had credit facilities totalling MSEK 1,889 at the end of the year, of
which MSEK 1,066 was drawn. The average duration of the agreed credit facilities was 3.8 years.
The long-term credit facilities chiefly comprise a syndicated loan agreement
for MEUR 140 which falls due in February 2019. Furthermore, the Group has
acquisition financing of MUSD 35 and approximately MSEK 324 in short-term
credit facilities and external local financing in subsidiaries. The reason for individual subsidiaries having external financing is that taxes and other regulations
in certain countries make it unfavourable to take up loans from foreign Group
companies.
Loan maturity structure
Credit facility
Of which
drawn
2015
379
108
2016
55
55
2017
55
55
2018
55
55
2019 and later
1,345
793
Total
1,889
1,066
Interest rate risk
At the end of the year, Gunnebo’s loan portfolio had an average interest term of
12 (2) months, and the average rate of interest on the loan portfolio* was 1.9%
(1.8%). Given the same borrowing liability and the same interest terms as at the
end of the year, a one percentage point change in the market interest rate
would change the Group’s interest cost by approximately MSEK 7 on an annual
basis.
A one percentage point change in the market interest rate would also result
in a change in the market value of outstanding interest derivatives of approximately MSEK 20, which affects other comprehensive income.
*Including margins and interest derivatives related to the loan portfolio through hedge
accounting.
Translation exposure (income statement)
Exchange rate fluctuations also affect Group results when income statements
of foreign subsidiaries are translated into Swedish kronor. Expected future
income in foreign subsidiaries is not hedged.
Credit risk
Financial credit risk
Credit risk refers to the risk of a loss if the counterparty fails to fulfil its obligations. Exposure arises both when investing surplus liquidity and in receivables
from banks which arise via derivative instruments. Gunnebo’s finance policy
Gunnebo Annual Report 2014 Currency risks
Currency effects affected operating profit marginally.
Transaction exposure
The forecast commercial currency flow after net calculations of opposite flows in
the same currencies amounts to MSEK 423 (430) on an annual basis. On the closing day, the proportion of this flow hedged was 0% (0%). Forward contracts that
matured during the year had an effect of MSEK 0.0 (0.0) on the result, when compared with the conversion of currency flows at the spot rates prevailing at the
67
Financial Reporting
Note 3 cont.
time of conversion. Total outstanding forward cover at the year-end was nominally MSEK 0.0 (0.0).
Hedge accounting
Fair value hedge
Changes in the fair value of derivatives which are identified as fair value hedges
and which fulfil the terms of hedge accounting are reported in the income
statement together with changes in fair value of the asset or liability which has
given rise to the hedged risk.
Translation exposure
The net assets of foreign subsidiaries amounted to MSEK 923 (718) on December 31, 2014. The Group hedges a small proportion of these assets through
loans and forward contracts in corresponding currencies. This hedging includes
the tax effect.
Cash flow hedging
The effective portion of changes in fair value of derivative instruments which
have been identified as cash flow hedges and which fulfil the terms of hedge
accounting are recognised via other comprehensive income and accumulated
under equity. The gain or loss attributable to the ineffective portion is reported
directly in the income statement.
Accumulated amounts in equity are reversed to the income statement in the
periods during which the hedged item affects the result (for example when the
forecast hedged sale takes place).
When a hedging instrument expires or is sold, or when the hedge no longer
fulfils the terms of hedge accounting and there are accumulated gains or losses
regarding the hedge in equity, these gains/losses remain in equity until the forecast transaction is finally reported in the income statement. When a forecast
transaction is no longer expected to take place, the accumulated gain or loss recognised in equity is immediately transferred to the income statement.
Sensitivity analysis
A 10% weakening in the value of the Swedish krona against all other currencies
would increase profit by a total of approximately MSEK 42, of which approximately MSEK 27 would be netted transaction exposure, without taking the
Group’s forward cover into account. The remaining MSEK 15 is attributable to
translation exposure (income statement).
A weakening of the Swedish krona by 10% against the Group’s most important currencies, the euro and US dollar, would have differing effects: with the
euro it would increase profit by MSEK 22, while with the US dollar it would
reduce profit by MSEK 20.
Such a weakening of the Swedish krona would also mean an increase in
equity of MSEK 17 with the euro and an increase in equity of MSEK 11 with the
dollar when translating foreign net assets into Swedish kronor.
Accounting treatment of derivative instruments and hedges
Derivative instruments are reported in the balance sheet on the contract date
at fair value, both initially and upon subsequent revaluations. The method for
reporting the gain or loss arising upon revaluation depends on whether the
derivative is identified as a hedging instrument and, if that is the case, the
nature of the item being hedged. The Group identifies derivatives as: (1) a hedge
of fair value of an identified asset or liability or a firm commitment (fair value
hedge); (2) a hedge of a highly probable forecast transaction (cash flow hedge);
or (3) a hedge of a net investment in a foreign operation (net investment
hedge). When the transaction is entered into, the relationship between the
hedging instrument and the hedged item is documented, as is the aim of the
risk management and the strategy for taking various hedging measures. The
Group documents at the beginning of the hedge and continuously thereafter
whether the derivative instruments used in the hedging transactions are effective in evening out changes in the fair value or cash flow of hedged items.
Information about the fair value for derivative instruments used for hedging
is provided in a summary on page 69.
Hedging of net investments in foreign operations
Net investment hedges in foreign operations are reported in a similar way to cash
flow hedges. Gains or losses regarding hedging instruments relating to the effective
portion of hedging are recognised via other comprehensive income and accumulated under equity. Gains or losses attributable to the ineffective portion are recognised in the income statement. Accumulated gains and losses in equity are recognised in the income statement when the foreign operation is divested or
discontinued.
Receivables and liabilities in foreign currencies
Currency forward contracts are used to hedge receivables and liabilities in foreign currencies. To protect against such currency risks, hedge accounting is not
applied since a financial hedge is reflected in the accounts in that both the
hedged item and the hedging instrument are recognised at the exchange rate
on the closing day, and that exchange rate fluctuations are recognised in the
income statement.
Interest-rate swaps
The nominal value of outstanding interest-rate swap agreements relating to
cash flow hedges amounted to MSEK 952 (537) on December 31, 2014. There
Liquidity risk
The contracted maturity dates for the Group’s financial instruments are shown below.
The amounts are nominal and include interest payments.
Less than
6 months
Finansiella tillgångar och skulder
Long-term financial receivables
Accounts receivable
Liquid funds
Total
contracted
cash flow
6–12
months
1–2 years
—
6
—
—
—
6
1,125
—
—
—
—
1,125
2–3 years
3–6 years
447
—
—
—
—
447
–1,077
–11
–22
–22
–66
–1,198
–659
—
—
—
—
–659
outflow
–2
–3
–6
–4
–3
–18
inflow
0
0
0
0
0
0
-C
urrency forward contracts included in hedge accounting
outflow
—
—
—
—
—
—
inflow
—
—
—
—
—
—
- Currency forward contracts not included in hedge accounting
outflow
–648
—
—
—
—
–648
Bank loans and overdraft facilities*
Accounts payable
Derivatives
- Interest-rate swap agreements
inflow
Total
634
—
—
—
—
634
–180
–8
–28
–26
–69
–311
*Interest maturity on borrowing under the Group’s syndicated credit facilities falls within 6 months but the guaranteed credit facilities do not mature until 2019.
For financial liabilities with a long contracted term but a short/variable fixed interest, the variable interest has been adopted as the quoted interbank rate as at December 31, 2014. The base
currency of the currency forward contract has been re-measured at the applicable closing rate as at December 31, 2014 while the future flows of the other type of currency are measured at
the contracted rate.
were no interest-rate swap agreements relating to fair value hedges on the
closing day
Derivative instruments
Nominal amounts
2014
2013
—
179
Interest-rate swap agreements
Term of less than 1 year
Term 1–2 years
—
—
Term 2–5 years
952
358
Interest-rate swap agreements total
952*
537
Currency forward contracts**
Total
634
665
1,586
1,202
*Of which MSEK 571 refers to interest-rate swap agreements starting after
December 31, 2014.
**Gross amount calculated at future forward rate.
Financial assets and liabilities covered by netting or similar agreements
The table below shows the Group’s derivatives on the closing day taking into
account the netting opportunities.
Gross
Netting
agreement
0.7
–0.7
0.0
–29.3
0.7
–28.6
Derivatives
Assets
Liabilities
Net
The Group has entered into general agreements (ISDAs) with all of its counterparties regarding transactions in derivative instruments. All receivables and liabilities related to such instruments may, therefore, be offset in their entirety
against the respective counterparty. On December 31, 2014, the Group had not
applied net accounting for derivative instruments or for any other important
assets and liabilities.
The capital structure of the Group
One of Gunnebo’s long-term financial goals is to have an equity ratio of no less
than 30%. The equity ratio at the end of the year was 35% (34%).Another of
Gunnebo’s aims is to achieve a return of 15% on capital employed. The return on
capital employed for 2014 was 12.1% (7.9%).
Gunnebo’s borrowing is unsecured. Borrowing is limited, however, by financial obligations in the loan agreements in the form of covenants. These mainly
relate to the key ratios of interest coverage ratio and net debt/EBITDA. With
regard to the prevailing terms in the loan agreements, available credit facilities
amounted to MSEK 1,263 at the end of the year as all financial commitments in
the form of covenants were fulfilled. The Group expects all covenants to be fulfilled also in 2015.
Measurement at fair value
The carrying amounts and fair values of the Group’s financial instruments are
shown in the table below.
Financial instruments measured at fair value
For all assets and liabilities measured at fair value, which comprise derivative
instruments, the fair value has been established based on measurement techniques which are, in all essentials, based on observable market data. According
to the fair value hierarchy of IFRS 13, such measurement methods are referred
to as Level 2*.
The table below presents the assets and liabilities measured at fair value.
Other financial instruments
The carrying amount of interest-bearing assets and liabilities in the balance
sheet can deviate from their fair value, as a result of changes to the market
interest rates among other things. The fair value has been calculated by discounting future payment flows to current interest rates and exchange rates for
equivalent instruments.
For financial instruments such as accounts receivable, accounts payable and
other non-interest-bearing financial assets and liabilities, which are recognised
at amortised cost less any write-down, the fair value is deemed to be the same
as the carrying amount due to the short anticipated duration.
The Group’s long-term borrowing primarily relates to long-term credit facilities but with short fixed interest rate periods and a stable credit margin. The
fair value is therefore deemed to be the same as the carrying amount.
According to the fair value hierarchy of IFRS 13, the methods for establishing
fair value for other financial instruments are classified as Level 2*.
*In IFRS 13, financial instruments are classified in a hierarchy of three levels, based on the
information used to establish their fair value. Level 1 refers to fair values based on quoted
prices on an active market for similar financial assets and liabilities. Level 2 refers to fair
values established based on directly observable market inputs other than Level 1 inputs.
Level 3 refers to fair values based on valuation models with inputs based on non-observable market data.
2014
Financial assets
2013
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets measured at fair value*
0.7
0.7
3.9
3.9
- of which derivatives for which hedge accounting does not apply
0.7
0.7
3.9
3.9
-o
f which currency derivatives regarding commercial exposure
for which hedge accounting of cash flows applies
—
—
—
—
- of which currency derivatives for hedging net investment abroad
—
—
—
—
Loan receivable and accounts receivable**
1,578.1
1,578.1
1,436.5
1,436.5
1,578.8
1,578.8
1,440.4
1,440.4
Financial liabilities measured at fair value***
29.3
29.3
6.2
6.2
- of which derivatives for which hedge accounting does not apply
15.0
15.0
1.4
1.4
-o
f which interest-rate swap agreements for which hedge accounting of cash flows
applies
14.3
14.3
4.8
4.8
Financial liabilities
-o
f which currency derivatives regarding commercial exposure
for which hedge accounting of cash flows applies
—
—
—
—
- of which currency derivatives for hedging net investment abroad
—
—
—
—
Other financial liabilities****
1,726.0
1,726.0
1,681.2
1,681.2
Total financial liabilities
1,755.3
1,755.3
1,687.4
1,687.4
* These assets are recognised as other current receivables in the Group balance sheets.
** A ssets recognised as other long-term and current receivables, accounts receivable and
liquid funds in the consolidated balance sheet
Gunnebo Annual Report 2014 *** Liabilities recognised as other current liabilities in the consolidated balance sheet.
**** Liabilities recognised as accounts payable as well as short-term and long-term
borrowing.
69
Financial Reporting
Note 4
Critical accounting estimates and assessments
When drawing up the annual report in accordance with IFRS and good accounting practice, the Group has made estimates and assumptions about the future
which affect the carrying amounts of assets and liabilities. These estimates and
assessments are continuously evaluated and are based on historical experience
and other factors considered reasonable under the prevailing conditions. Where
it is not possible to establish the carrying amount of assets and liabilities using
information from other sources, these estimates and assumptions are used as
the basis for valuations. Different assumptions and estimates may give different
results and the predicted outcome will rarely correspond exactly to the actual
result. The assumptions and estimates deemed to have the greatest impact on
Gunnebo’s financial position and results are described below.
Capitalised product development costs
Expenditure on development projects is capitalised to the extent it is expected
to generate economic benefits. Capitalisation begins when the management
considers that the product will be technically or economically sound. This means
that specific criteria must be met before a development project can be capitalised as an intangible asset. Capitalisation ends and depreciation of the capitalised development expenditure begins when the product is ready for sale.
Capitalised development costs are subject to an impairment review when there
is any indication of a reduction in value. The management decides on the depreciation period as well as the write-down requirement review. On December 31,
2014, the Group’s capitalised development costs were MSEK 57.
Review of write-down requirement for goodwill and brands
The Group conducts an impairment review every year to assess whether there is
a write-down requirement for goodwill and brands with an indefinite useful life
in accordance with the accounting principles described in Note 2 above. The
review requires an estimate of the parameters affecting future cash flow as well
as the specification of a discounting factor. The recoverable amounts for cashgenerating units have then been established by calculating value in use. Note
14 contains details of the important assumptions made when reviewing the
write-down requirement of goodwill and other assets with indefinite useful
lives, as well as a description of the effect of possible changes to the assumptions that form the basis of the calculations. As at December 31, 2014, the carrying amount of goodwill and brands with an indefinite useful life was MSEK
1,560.
Disputes
Provisions for disputes are estimates of the future cash flows required in order
to settle the commitments. Disputes mainly relate to contractual obligations
attributable to contracts with customers and suppliers, but other kinds of dispute may arise in the normal course of business. The outcome of complex disputes can be difficult to predict and the disputes can be both time-consuming
and costly. It cannot therefore be ruled out that an unfavourable outcome in a
dispute may have a significant effect on the Group’s profits and financial position. The management considers it unlikely, however, that any disputes of which
it is currently aware in which Gunnebo is involved will have a significant effect
on the Group’s accounts. The Group’s provision for disputes was MSEK 31 on the
closing day. In addition provisions for tax disputes total MSEK 3.
Valuation of deferred tax assets
Deferred tax receivables relating to temporary differences of MSEK 114 have
been entered in the Group based on the assessment that it is likely they will be
able to be utilised and that they will entail lower tax payments in the future.
Furthermore, deferred tax assets reported in relation to loss carry-forward were
MSEK 225 as at December 31, 2014. The carrying amount of these tax assets has
been reviewed on the closing day and it has been considered likely that the deduction can be used against a surplus in future taxation. The greater part of the tax
assets relate to countries with an unlimited period in which the loss carry-forwards
can be used. The Group’s business in these countries is either profitable or is
expected to generate a surplus in the future. Gunnebo therefore believes that there
are major factors to indicate that it will be possible to utilise the loss carry-forwards
to which the tax assets can be attributed against future taxable surpluses.
Furthermore, on December 31, 2014, the Group had unused loss carry-forwards
and other deductible temporary differences totalling just over MSEK 600, for which
no deferred tax assets were recognised.
Changes to the above assumptions and assessments may result in significant differences in the valuation of deferred tax assets.
Guarantee commitments
Many of the products sold by Gunnebo are covered by guarantees that apply for a
period specified in advance. Provisions for these product guarantees are based on
historical data and on the expected costs of quality issues that are known or can
be predicted. Provisions are also made for guarantees of a goodwill nature and
extended guarantees. Total provisions for guarantees were MSEK 40 on December
31, 2014. Even though changes to the assumptions may result in different valuations, it is considered unlikely that these will have a significant effect on the
Group’s profits or financial position.
70 Remuneration after the end of employment
Reporting of provisions for defined benefit pension plans and other pension
benefits is based on actuarial calculations using assumptions relating to discount rates, future salary increases, personnel turnover and demographic conditions. The assessments made in relation to these assumptions affect the total
value of the pension commitments and major changes in these assessments
could have a significant impact on the Group’s profits and financial position.
The same is true of any changed assessment in relation to whether or not pension insurance with Alecta should be recognised as a defined contribution plan.
On December 31, 2014, the Group’s provision for pensions was MSEK 425.
Obsolescence reserve
Inventory is measured at the lower of cost and net selling price in accordance
with the first-in first-out principle (FIFO). The value of inventory is adjusted by
an estimated reduction in value for physical damage, discontinued items, overdimensioned stock and other forms of obsolescence. On December 31, 2014, the
Group’s reserve for obsolescence amounted to MSEK 78.
Accounts receivable
A reserve for doubtful receivables is made when it is likely that the Group will
not receive the amounts due in accordance with the receivables’ original terms.
The size of the reserve comprises the difference between the assets’ carrying
amount and the present value of assessed future cash flows. The assessments
made in relation to these future cash flows affect the value of the accounts
receivable item and a major change in these assessments could have a significant impact on the Group’s profits and position.
The Group’s accounts receivable after reserve for doubtful receivables was
MSEK 1,125 on the closing day.
Note 5
Reporting by segment
Operating segments
2014
Net sales
2013
Region Europe,
Middle East
& Africa
Region
Asia-Pacific
Region
Americas
3,644
1,029
108
131
Total
Region Europe,
Middle East
& Africa
Region
Asia-Pacific
Region
Americas
Total
884
5,557
3,474
954
843
5,271
113
352
–27
126
123
222
Financial income
14
13
Financial expenses
–49
–88
Tax
–90
–45
227
102
Operating capital**
Operating assets
1,547
393
530
2,470
1,549
276
418
2,243
Operating liabilities
–914
–235
–288
–1,437
–849
–146
–200
–1,195
633
158
242
1,033
700
130
218
1,048
Capital expenditure
42
15
21
78
55
13
4
72
Depreciation/Amortisation
57
16
15
88
60
11
13
84
Total operating capital
Other information
Geographical information
Net sales***
Operating capital**
Capital expenditure
2014
2013
2014
2013
2014
2013
1,030
1,023
161
171
13
25
USA
486
447
206
156
3
1
India
429
390
57
33
5
8
UK
328
255
71
66
6
4
Spain
238
232
33
39
0
4
Germany
232
251
44
93
4
6
France
Sweden
203
189
–2
45
2
6
Canada
189
198
29
29
0
0
Denmark
170
158
8
13
0
0
Other
2,252
2,128
426
403
45
18
Total
5,557
5,271
1,033
1,048
78
72
* Income and expenses of a non-recurring nature had an effect on the Group’s results of MSEK –14 (–84). Region Europe, Middle East & Africa has been burdened by MSEK –1 (–74), Region
Asia-Pacific by MSEK –9 (–8) and Region Americas by MSEK –4 (–2).
** Operating assets comprise other intangible assets, property, plant and equipment, stock, accounts receivable, other receivables as well as prepaid expenses and accrued income.
Operating liabilities comprise accounts payable, other liabilities as well as accrued expenses and deferred income.
*** In the geographical representation of sales, the customer’s location determines the geographical region to which the sale is allocated.
Financial Reporting
Note 6
Note 10
Capital gains
Currency gains
Gain from divestiture of operations*
2014
2013
11.0
3.4
7.1
11.0
73.4
—
Remuneration for employees
Temporary personnel and subcontractors
310.8
293.1
Transport costs
127.1
121.8
Vehicle and travel costs
208.5
206.5
Other
4.2
7.1
Total
95.7
21.5
*Refers to Fichet-Bauche Télésurveillance which was divested in June 2014.
For further information, see Note 31, Divestiture of operations.
Note 7
Operating expenses allocated by type of cost
Direct material costs
2013
1,767.4
Change in stock
–7.9
11.9
1,935.8
1,834.6
Depreciation and write-down of non-current assets
Other costs
Total operating expenses*
2014
2014
1,924.5
2013
Capital losses
0.4
7.4
Currency losses
4.4
3.2
Other
0.7
1.7
Total
5.5
12.3
88.0
86.2
708.5
735.9
5,295.3
5,057.4
*Relates to cost of goods sold, selling expenses and administrative expenses.
Note 11
Other financial income and expenses
2014
2013
Currency gains
1.4
0.5
Other
0.7
0.7
Total
2.1
1.2
Currency losses
–1.5
–0.5
Bank charges and bank guarantee costs
–9.7
–8.5
—
–44.7
Other financial income
Note 8
Depreciation by function
Depreciation has been charged against the operating profit as follows:
Cost of goods sold
Selling expenses
2014
2013
57.8
55.5
6.7
7.0
23.2
21.7
Total
87.7
84.2
Note 9
Write-down of financial assets*
Other
–0.7
–0.2
Total
–11.9
–53.9
*Relates to the write-down of financial assets attributed to Perimeter Protection, which
was divested in 2011.
Income and expenses of a non-recurring nature by
function
Note 12
Income of a non-recurring nature has been included in operating profit as
follows:
2014
2013
73.4
—
Current tax
Total
73.4
—
Deferred tax
Expenses of a non-recurring nature have been charged against the operating
profit as follows:
2014
2013
Cost of goods sold
31.7
32.8
Selling expenses
24.5
19.3
31.6
30.1
0.1
1.8
87.9
84.0
Total
Income of a non-recurring nature refers to gain from divestiture of operations.
For further information, see Note 31, Divestiture of operations.
Expenses of a non-recurring nature during the year can primarily be attributed
to staff cuts and other structural measures in Region Europe, Middle East & Africa.
72 Taxes
2014
2013
–105.8
–86.7
16.5
41.3
Total
–89.3
–45.4
The Group’s tax expense amounted to MSEK –89.3 (–45.4) and the tax rate to
28.2% (30.9%). The tax rate for the year was positively affected by non-taxable
income attributable to the divestment of Fichet-Bauche Télésurveillance, and by a
more favourable composition of Group profit, with profit improvements in countries where the Group is not yet in a tax position.
Tax calculated on Group profit before tax differs from the theoretical amount
which would have been produced from a weighted average tax rate for profits in
the consolidated companies as described below.
Tax calculated in accordance with national tax rates
for each country
2014
2013
–84.9
–39.1
Tax attributable to previous years
1.0
–3.4
Effects of tax deficits for which no deferred tax
asset has been stated
7.1
–0.3
Effects of non-deductible expenses and nontaxable income etc.
–12.5
–2.6
Tax cost
–89.3
–45.4
Note 14
Deferred tax assets and liabilities are attributable to the following items:
Deferred tax assets
Loss carry-forward
2014
2013
Intangible assets
2014 financial year
Opening cost Jan 1, 2014
Goodwill
Other intangible
assets
1,322.4
437.7
—
26.4
224.7
211.2
Hedging transactions
1.9
1.3
Capital expenditure
Inventories
2.2
2.9
Acquisitions
51.7
–
73.3
60.7
–5.2
–2.7
Pension commitments
Provisions
24.3
19.7
Sales/disposals
Other deductible temporary differences
12.8
11.1
Translation differences
Total
339.2
306.9
Deferred tax liabilities
2014
2013
Non-current assets
60.0
56.1
6.0
8.0
66.0
64.1
273.2
242.8
Other taxable temporary differences
Total
Deferred tax assets and tax liabilities, net
The change pertaining to deferred taxes is as follows:
2014
2013
242.8
197.6
8.2
0.1
16.5
41.3
6.1
3.8
–0.2
—
–0.2
—
Opening value, net
Deferred tax in the income statement
Deferred tax recognised in other comprehensive
income
Closing value, net
273.2
242.8
Deferred tax assets attributable to loss carry-forwards are only reported if it is
probable that the deduction can be netted against a surplus in future taxation. At
the end of 2014, loss carry-forwards totalled over MSEK 600 where no deferred tax
assets have been observed. MSEK 0 of this is due within five years. There are both
timing and other constraints which mean that these loss carry-forwards are not
expected to be able to be utilised.
Note 13
Earnings per share
2014
Net profit for the year attributable to parent
company shareholders, MSEK
Average no. of shares (in thousands)
Earnings per share, SEK*
2013
226.2
98.1
75,979
75,863
2.98
1.29
Earnings per share are calculated by dividing the profit attributable to the parent company shareholders by the average number of outstanding shares during
the period.
A dividend of SEK 1.00 (1.00) per share is proposed.
*Earnings per share before and after dilution.
Closing accumulated cost
Dec 31, 2014
—
–6.1
121.1
34.7
1,490.0
490.0
Opening amortisation and write-downs
Jan 1, 2014
—
265.6
—
–2.5
Sales/disposals
—
–3.3
31.2
Amortisation
—
Write-downs
—
0.2
—
14.2
Closing accumulated amortisation and
write-downs Dec 31, 2014
—
305.4
Closing carrying amount Dec 31, 2014
1,490.0
184.6
2013 financial year
Goodwill
Other intangible
assets
1,319.7
416.0
—
23.7
Capital expenditure
Acquisitions
Sales/disposals
Dec 31, 2013
8.6
—
—
–4.3
–5.9
2.3
1,322.4
437.7
Opening depreciation and write-downs
Jan 1, 2013
—
234.0
Sales/disposals
—
–2.4
Amortisation
—
30.1
—
3.9
Closing accumulated amortisation and
write-downs Dec 31, 2013
—
265.6
Closing carrying amount Dec 31, 2013
1,322.4
172.1
Other intangible assets in the Group consist primarily of acquisition-related
assets in the form of brands and customer relations, as well as expenditure on
software and capitalised expenditure on product development. The useful life
is limited for all asset types included in this item, with the exception of brands.
Amortisation is linear over the useful life.
Capitalised expenditure on product development amounts to MSEK 56.7
(59.2). During the course of the year, capital expenditure on product development projects totals MSEK 12.2 (14.8). The closing carrying amounts for customer relations and brands total MSEK 30.7 (31.4) and MSEK 69.9 (58.2) respectively. The carrying amount for brands refers entirely to brands with an
indefinite useful life attributable to the Bank Security & Cash Handling business
area. Other asset types included in the item mainly refer to software, and the
closing carrying amount for these assets amounts to MSEK 27.3 (23.3).
Review of write-down requirement
Goodwill is distributed between the Group’s cash-generating units as follows:
Specification of goodwill
2014
2013
Bank Security & Cash Handling
747.1
638.8
Secure Storage
197.2
185.9
Global Services
305.0
270.2
Entrance Control
211.4
198.2
Gateway
Carrying amount
Gunnebo Annual Report 2014 29.3
29.3
1,490.0
1,322.4
73
Financial Reporting
Note 14 cont.
The write-down requirement for goodwill and brands with an indefinite useful
life is reviewed annually, and when there are indications that a write-down is
necessary.
The recoverable amount for cash-generating units has been established by
calculating the value in use. In terms of the write-down test, this has been carried out at the lowest level where separable cash flows have been identified.*
The value in use of goodwill and brands with an indefinite useful life in relation to Gunnebo’s cash-generating units has been calculated on the basis of discounted cash flows. Cash flows for the first year are based on a budget set by
the Board of Directors, and for the two subsequent years cash flows have been
calculated based on financial plans approved by the Board of Directors. For the
cash-generating units that contain assets with an indefinite useful life, cash
flows beyond this three-year period have been established with a growth rate
equivalent to 2.0%. This growth rate is based on a cautious assumption and is
expected to be in line with the security industry’s long-term growth rate in the
countries where Gunnebo operates business.
The forecast cash flows have been computed at present value with a dis-
count rate of 10.0% (10.5%) before tax. The discount rate equates to the Group’s
weighted average cost of capital, WACC, for the required return on equity and
the cost of external borrowing. The calculation of required return on equity is
based on a risk-free interest rate of 1.5% and a risk premium of 7.3%.
Using a discount rate of 10.0%, the value in use exceeds the carrying amount
for all cash-generating units.
Adverse effects in the form of a one percentage point increase in the discount rate or a 20% decrease in operating margin would not individually have
such a large impact that the recoverable amount would be reduced to a value
equal to or less than the carrying amount for any cash-generating unit, with the
exception of the Bank Security & Cash Handling business area. A 20% decrease
in operating margin would mean that the recoverable amount would be MSEK 9
less than the carrying amount for this business area.
*According to IAS 36, the impairment review for goodwill is based on the smallest group of
assets to which goodwill is allocated and which gives rise to payments. For Gunnebo these
cash-generating units are the business areas.
Bank Security & Cash Handling
Secure Storage
Global Services
Entrance Control
Gateway
1,279
289
505
343
71
Carrying amount
Discount rate before
tax is increased to
11.0%
Value in use decreases
but still exceeds the carrying amount
Operating margin
decreases by 20%
and is MSEK 9 less than
the carrying amount.
Note 15
Construction in
progress
Buildings
and land*
Machinery
Equipment
458.2
370.6
290.9
7.4
Capital expenditure
1.6
28.0
10.7
11.0
Acquisitions
0.2
—
9.8
—
Acquisitions
—
–0.2
–9.7
—
Sales/disposals
–111.1
–8.6
–9.3
—
Reclassifications
2.2
0.1
2.0
1.9
–4.0
6.1
30.1
32.8
21.8
1.3
Dec 31, 2014
Closing accumulated cost Dec 31,
2013
458.2
379.1
424.6
316.1
15.7
Depreciation and write-downs
Jan 1, 2014
Jan 1, 2013
328.6
284.0
210.8
—
2014 financial year
Sales/disposals
Reclassifications
Acquisitions
2013 financial year
Capital expenditure
Acquisitions
Construction in
progress
Buildings
and land*
Machinery
Equipment
472.8
396.1
293.6
16.5
3.9
8.1
21.3
14.8
1.7
—
1.0
—
–28.5
–39.5
–30.7
–1.3
10.6
10.0
–22.8
–4.7
–4.3
0.2
370.6
290.9
7.4
332.6
302.3
216.8
—
0.2
—
0.8
—
0.0
—
7.2
—
Sales/disposals
–23.8
–38.8
–27.5
—
—
–0.2
–3.7
—
Depreciation
10.1
19.7
24.3
—
–98.7
–5.2
–8.6
—
Write-downs
2.0
—
—
—
Depreciation
9.8
22.4
24.3
—
7.5
0.8
–3.6
—
Write-downs
—
—
0.1
—
328.6
284.0
210.8
—
129.6
86.6
80.1
7.4
Sales/disposals
19.8
24.1
16.4
—
Closing accumulated
depreciation and write-downs
Dec 31, 2014
Closing accumulated
depreciation and write-downs
Dec 31, 2013
259.5
325.1
246.5
—
Closing carrying amount
Dec 31, 2013
Dec 31, 2014
119.6
99.5
69.6
15.7
Specification, buildings and land
2014
2013
Carrying amount, buildings*
92.3
102.9
Carrying amount, land
27.3
26.7
Total carrying amount
119.6
129.6
*Including land improvements
Note 16
Note 19
Holdings in associated companies
Opening book value
Share of profit of associated companies
Dividends
2014
2013
10.1
11.2
Prepaid insurance premiums
0.4
–0.1
Prepaid rent
9.2
7.3
–1.3
–1.1
Accrued interest
1.0
1.0
Currency differences
0.4
0.1
Closing book value
9.6
10.1
Book value
2014
2013
10.4
7.3
Other items
65.3
38.6
Total
85.9
54.2
2014
2013
Note 20
Liquid funds
% share
of capital
2014
2013
FBH Fichet Ltd, UK
49
1.1
1.1
Ritzenthaler Ltd, UK*
45
—
0.0
Short-term investments
46.8
39.1
Gateway Security Portugal Ltda, Portugal
55
0.0
1.6
Cash and bank
400.2
352.9
Prodimo AB, Sweden
48
6.9
6.1
Total
447.0
392.0
K/H Enterprises Inc., USA
31
1.6
1.3
9.6
10.1
Group’s holdings in associated companies
Total
Gunnebo’s share in the income and profit of the associated companies after tax
amounts to MSEK 55.1 (49.0) and MSEK 0.4 (–0.1) respectively. The share of their
total assets is MSEK 31.6 (31.5) and the share of their liabilities is MSEK 22.0 (21.4).
Note 21
Equity reserves
Hedging
reserve
Translation
reserve
Total reserves
–4.0
–256.8
–260.8
- Subsidiaries
—
92.2
92.2
- Associated companies
—
0.4
0.4
—
5.1
5.1
–9.1
—
–9.1
2.0
—
2.0
—
—
—
*During the year, the participation in Ritzenthaler Ltd was divested.
Currency differences:
Note 17
Inventories
2014
2013
215.1
193.2
19.9
22.9
Finished goods
444.2
401.1
Installation work in progress
106.4
74.0
Raw materials
Work in progress
Less advance payments from customers
–91.4
–82.0
Total
694.2
609.2
Of the inventories, MSEK 649.4 is measured at cost and MSEK 44.8 at net selling
price. At December 31, 2014, the Group’s reserve for obsolescence amounted to
MSEK 78.0 (66.8). See also Note 4 Obsolescence reserve.
Note 18
Cash flow hedges:
- Changes in the fair value during
the year
- Tax on changes in fair value
- Transfers to income statement
- Tax on transfers
to income statement
—
—
—
–11.1
–159.1
–170.2
Hedging
reserve
Translation
reserve
Total reserves
–6.1
–175.1
–181.2
–78.8
Currency differences:
Accounts receivable
2014
2013
Accounts receivable, not yet due
882.8
794.9
Overdue, 1–30 days
164.1
163.6
49.6
56.1
28.2
26.8
Overdue, over 90 days
- Subsidiaries
—
–78.8
- Associated companies
—
0.1
0.1
—
–3.0
–3.0
Cash flow hedges:
- Changes in the fair value during
the year
- Tax on changes in fair value
51.7
50.8
1,176.4
1,092.2
2014
2013
Provision at the beginning of the year
–53.7
–50.4
Reserve for anticipated losses
–10.5
–20.1
Confirmed losses
7.1
8.9
Discharged payment of reserved receivables
9.6
7.7
Opening balance
Divestiture
0.7
—
Issue via conversion of warrants
–0.3
–0.4
Total
Provision for doubtful receivables
Provision at the end of the year
Gunnebo Annual Report 2014 –4.3
0.6
–51.4
–53.7
1,125.0
1,038.5
- Transfers to income statement
- Tax on transfers to income
statement
No. of shares
Closing balance
2.7
—
2.7
–0.6
—
–0.6
—
—
—
—
—
—
–4.0
–256.8
–260.8
2014
2013
75,914,098
75,855,598
259,403
58,500
76,173,501
75,914,098
75
Financial Reporting
Note 22
Pension commitments
Remuneration to employees after the end of employment, such as pensions,
healthcare benefits and other remuneration, is predominantly funded through
payments to insurance companies or authorities which thereby take over the
obligations to the employees; these are known as defined contribution plans.
The remainder is carried out through defined benefit plans whereby the commitments remain within the Group. The main defined benefit plans are in the
UK and Sweden (FPG/PRI provision). There are other defined benefit plans in
Canada, France, Germany, the Netherlands, Italy, Indonesia, India and South
Africa.
With regard to defined benefit plans, the company’s costs and the value of outstanding commitments are estimated using actuarial calculations, which aim to
establish the present value of commitments issued.
At December 31, 2014, the Group’s total defined benefit pension commitment
amounted to MSEK 1,083.2 (875.3). Contributed funds to cover these commitments, known as plan assets, amounted to MSEK 658.0 (514.7). Plan assets mainly
comprise shares and interest-bearing current receivables. No plan assets comprise
financial instruments in Gunnebo AB or assets used within the Group.
The Group’s net provision for pensions, which is recognised in the balance
sheet, amounted to MSEK 425.2 (360.6). The pension commitment has increased
in the majority of countries compared with last year due primarily to a lower discount rate and exchange rate fluctuations.
The defined benefit pension cost recognised in the income statement
amounted to MSEK 42.7 (31.4), of which MSEK 14.5 (12.5) related to financial
expenses. Actuarial gains and losses recognised in other comprehensive income
amounted to MSEK –35.5 (–21.0) net.
UK
In the UK, pension commitments are mainly secured through payments into a
defined benefit pension plan. The plan is closed to new employees but is still
open to the employees it covers. To meet legal requirements, the plan comprises an independent foundation and is funded.
The foundation’s assets are managed by a board comprising representatives
for Gunnebo and the employees who are members of the plan. The assets are
managed in accordance with national legislation and in collaboration with professional advisors and fund managers. The benefits are based on the employees’ final pay and the remaining average term for the commitments is 20 years.
The total defined benefit commitment increased to MSEK 650.3 (527.6). The
increase can be attributed to altered assumptions regarding discount rate and
to experience-based adjustments regarding demographic conditions. The value
of the foundation’s plan assets amounted to MSEK 532.4 (413.7), which gave a
net provision of MSEK 117.9 (113.9).
The defined benefit commitment has been calculated using a discount rate
based on high-quality corporate bonds with a term corresponding to the average remaining term of the commitment.
The costs for defined benefit pension plans in the UK recognised in the
income statement amounted to MSEK 14.3 (8.8), of which MSEK 5.0 (2.8) related
to financial expenses.
Sweden
The majority of the Group’s pension arrangements in Sweden comprise a
defined benefit pension plan. The commitment relates to lifelong retirement
pensions and the benefits are primarily based on the employees’ final pay. The
average remaining term for the commitment is 27 years.
The pension commitment at the end of the year amounted to MSEK 97.9
(83.1). There are no plan assets. The commitment has increased compared with
last year due to a lower discount rate.
The pension commitment has been calculated using a discount rate based on
the return on the market interest rate for Swedish housing bonds. These bonds
are considered to be high quality because they are secured with assets and the
housing bond market in Sweden is judged to be deep and liquid. The term of the
bonds equates to the average term of the commitment.
The costs for defined benefit pension plans in Sweden recognised in the
income statement amounted to MSEK 4.1 (4.5), of which MSEK 3.0 (2.9) related
to financial expenses. Costs for defined contribution plans amounted to MSEK
11.9 (10.7) and burdened operating profit.
76 MSEK 4.9 (4.1) of the cost for defined contribution plans comprises premiums
to Alecta/Collectum. This insurance policy encompasses several employers in
Sweden, and insufficient information is available from Alecta/Collectum to be
able to report the plan as a defined benefit plan.
Alecta’s collective funding ratio at the end of the year was 143% (148%). The
collective funding level is the difference between the company’s assets and
insurance commitments, based on Alecta’s calculation assumptions for insurance purposes, which do not comply with IAS 19.
Other countries
Total defined benefit commitments in other countries amounted to MSEK 335.0
(264.6) and the associated plan assets amounted to MSEK 125.6 (101.0). The net
provision recognised in the balance sheet amounted to MSEK 209.4 (163.6). The
largest pension provisions related to France and Germany where they amounted
to MSEK 91.3 (74.3) and MSEK 41.4 (43.1) respectively.
The weighted average term for the total commitment for other countries
amounts to 13 years.
Important actuarial assumptions, %
2014
2013
UK
3.7
4.5
Sweden
2.8
3.7
Other countries (weighted average)
3.8
4.3
Discount rate
Expected wage increase rate
UK
3.1
3.9
Sweden
3.0
3.0
2.8
3.4
Inflation
UK
3.1
3.4
Sweden
1.5
1.8
2.7
2.6
Reconciliation of pension
commitments
Present value
of commitments
Fair value of plan assets
Net provision
in balance sheet
Reconciliation of pension
commitments
Present value
of commitments
Fair value of plan assets
Net provision
in balance sheet
UK
Sweden
Other
countries
2014
Total
650.3
97.9
335.0
1,083.2
–532.4
—
–125.6
–658.0
117.9
97.9
209.4
425.2
UK
Sweden
Other
countries
2013
Total
527.6
83.1
264.6
875.3
–413.7
—
–101.0
–514.7
113.9
83.1
163.6
360.6
Of the present value of commitments, MSEK 868.2 (696.9) relates to funded
pensions and other plans, and MSEK 215.0 (178.4) to non-funded pensions and
other plans..
In 2015 the Group expects to make MSEK 43.7 (36.7) in payments relating to
defined benefit plans.
Specification of changes in defined benefit obligations
2014
2013
875.3
835.9
Specification of actuarial gains and losses recognised in
other comprehensive income
2014
2013
Return on plan assets excluding interest income
–39.8
Costs pertaining to employment
during the current year
15.7
17.2
–3.4
Actuarial gains (–) and losses (+) relating to altered
demographic assumptions
Interest expense on commitments
39.0
33.7
–27.3
–1.0
–1.0
financial assumptions
demographic assumptions
–27.3
financial assumptions
101.3
16.0
–1.3
10.7
101.3
16.0
Payroll tax on actuarial changes
2.6
–1.3
–1.3
10.7
Payroll tax on actuarial changes
2.6
–1.3
Total actuarial gains (–) and losses (+) recognised in
other comprehensive income
35.5
21.0
Contributions made by pension plan members
2.2
2.0
–34.0
–38.0
Specification of plan assets
2014
2013
10.3
–0.3
—
–5.0
–1.6
—
Opening balance
Experience-based gains (–) and losses (+)
Payment of pension benefits
Past service costs/income
Curtailments and settlements
Companies acquired and divested
Currency differences on foreign plans
Closing balance
Specification of changes in plan assets
Opening balance
101.0
5.4
1,083.2
875.3
2014
2013
514.7
493.7
–2.2
–2.0
Interest income on plan assets
24.5
21.2
Return on plan assets excluding amounts included
in interest income
39.8
3.4
Contributions made by pension plan members
Contributions to the plan made by the company
Payment of pension benefits
Assets used for settlement
Closing balance
Specification of changes i provisions for pensions
Opening balance
2.2
2.0
31.7
25.7
–21.9
–28.3
—
–5.0
69.2
4.0
658.0
514.7
2014
2013
360.6
342.2
Net cost entered in the income statement
42.7
31.4
Actuarial gains (–) and losses (+)
35.5
21.0
Payment of benefits
–12.1
–9.7
Contributions into funded plans
–31.7
–25.7
Companies acquired and divested
–1.6
—
31.8
1.4
425.2
360.6
2014
2013
Closing balance
Specification of pension costs in the income statement
Experience-based gains (–) and losses (+)
Government bonds
91.7
70.3
Commercial papers
208.9
155.4
Shares
335.9
276.7
Liquid funds
Total plan assets
21.5
12.3
658.0
514.7
Interest expense on pension commitments and interest income on plan assets are
classified as a financial cost. Other cost items are recognised under operating
profit and are allocated between cost of goods sold, selling expenses or administrative expenses depending on the employee’s function.
The table below shows how the defined benefit pension commitment is
affected in MSEK if the actuarial assumptions regarding discount rate, expected
wage increase rate and inflation each change by 1 percentage point.
Assumption
+1 percentage point
–1 percentage point
–191
194
Discount rate
Expected wage increase rate
38
–33
Inflation
63
–59
Maturity analysis
The expected maturity dates for the Group’s defined benefit pension commitment are shown below in nominal amounts.
Maturity analysis
Expected pension
payments
< 1 year
1–2
years
2–5
years
5–10
years
>10
years
Total
36
35
132
274
2,346
2,823
Costs pertaining to defined benefit plans:
Costs pertaining to employment during the current
year
15.7
17.2
Net interest
14.5
12.5
2.2
2.0
Past service costs/income
10.3
–0.3
Costs pertaining to defined benefit plan
42.7
31.4
Costs pertaining to defined contribution plans
49.3
49.0
Total pension costs in the income statement
92.0
80.4
of which:
Amount charged against operating profit
77.5
67.9
Amount charged against financial expenses
14.5
12.5
Total pension costs in the income statement
92.0
80.4
Financial Reporting
Note 23
Note 26
Other provisions
2014 financial year
Restructuring programmes
Disputes
Guarantees
Taxes
Other
Total
Opening balance
16.4
23.4
40.2
2.1
9.6
91.7
—
—
—
—
–0.6
–0.6
Provisions
during the year
18.6
11.3
25.2
0.6
1.4
57.1
Utilised during
the year
–20.3
–5.3
–23.5
—
–0.6
–49.7
–0.4
–0.7
–5.0
—
0.0
–6.1
0.9
2.1
3.2
0.2
0.4
6.8
15.2
30.8
40.1
2.9
10.2
99.2
2013 financial year
Restructuring programme
Disputes
Guarantees
Taxes
Other
Total
Opening balance
17.1
19.0
40.0
3.2
7.1
86.4
—
—
0.0
1.5
—
1.5
Divestiture
of operations
Reversed during
the year
Closing balance
Acquisition
of operations
Provisions
during the year
9.7
Utilised during
the year
23.8
—
4.5
48.5
–10.9
–3.9
–21.8
–0.3
–1.4
–38.3
Reversed during
the year
—
–3.0
–2.3
–2.4
–0.6
–8.3
0.5
0.8
0.5
0.1
0.0
1.9
16.4
23.4
40.2
2.1
9.6
91.7
Closing balance
10.5
Provisions for restructuring measures have been made mainly for reorganisation. The provisions are expected to be utilised during 2015.
For information relating to the assumptions and assessments made in
reporting provisions, see Note 4.
2014
2013
Guarantees
184.1
146.5
Total
184.1
146.5
Guarantees for the fulfilment of various contractual obligations are part of the
Group’s normal business activities. At the time of publication of this annual
report, there were no indications that guarantees provided will result in payments.
As a result of standard business operations, Gunnebo is a party in various
legal disputes. At the end of 2014, there were not deemed to be any disputes
that could entail a negative impact on the Group’s results and financial position.
See Note 4 and Note 35 for further information on disputes.
Note 27
Operating lease contracts
Leased assets
Future payment commitments for operating lease contracts have the following breakdown:
2015
89.9
2016
64.7
2017
34.5
2018
20.5
2019
11.2
2020 and later
20.2
Total
241.0
The year’s cost for leased assets amounted to MSEK 113.5 (104.7).
Note 28
2014
Note 24
Interest received
Borrowings
Interest paid
Long-term borrowing
2014
2013
Liabilities to credit institutions
958.0
848.8
Total
958.0
848.8
Short term borrowing
Overdraft facilities
56.0
Liabilities to credit institutions
Total
Total borrowing*
78 Total
Note 29
11.6
11.2
–34.4
–34.6
–9.8
–8.0
–32.6
–31.4
2014
11.4
2013
52.5
265.7
Amortisation of intangible assets
31.2
30.1
108.5
277.1
Depreciation of property, plant and equipment
56.5
54.1
1,066.5
1,125.9
*Loan maturity structure for the Group is reported in Note 3.
Note 25
Other items affecting cash flow
2013
Write-down of intangible assets
0.2
—
Write-down of property, plant and equipment
0.1
2.0
Share in profit of associated companies,
not distributed
0.9
1.2
Adjustment for provisions
3.0
3.0
54.5
27.2
–22.6
–11.7
Restructuring costs not affecting cash flow
2014
2013
Holiday pay liability
116.0
108.0
Accrued salaries
107.7
92.6
Social security charges
70.9
64.1
Deferred income
52.1
43.7
Accrued interest
6.9
4.3
Other items
202.4
159.6
Total
556.0
472.3
Restructuring costs paid,
previously recognised as costs
Capital gain from divestiture
of associated companies
–0.4
—
Capital gain from divestiture of operations
–73.4
—
Capital gain from sale/disposal of property, plant
and equipment
–10.2
6.3
39.8
112.2
Note 30
Assets and liabilities of acquired operations
2014
2013
2.8
1.7
Financial assets
0.1
0.3
3.9
10.4
Inventories
Current receivables*
Liquid funds
Current liabilities
Identifiable net assets
33.6
5.3
2.3
1.0
–2.4
–4.8
–23.7
–7.3
16.6
6.6
Goodwill
51.7
8.6
Total purchase sums
68.3
15.2
Less:
Purchase sums not paid
–12.4
–5.8
Acquisitions of own shares
–9.8
—
Liquid funds in acquired operations
–2.3
–1.0
Effect on Group liquid funds
43.8
8.4
Acquisitions in 2014
Acquisition of Diseños Inteligentes de Seguridad S.A. de C.V.
On August 28, 2014, Gunnebo acquired 100% of Mexican company Diseños
Inteligentes de Seguridad S.A. de C.V. (Dissamex), which provides service and
installation services in electronic security, primarily to banks. The acquired operation has annual sales of approximately MSEK 45 and 130 employees. The purchase sum is estimated at MSEK 32.0 and the Group goodwill arising from the
acquisition has not been finally established as the acquisition analysis is as yet
preliminary. Acquisition costs, which burdened profit, totalled MSEK 1.3. After
the acquisition the company has had sales of MSEK 23.9 and an operating profit
of MSEK 4.6.
Dissamex
Carrying
amount in
Group
1.3
Financial assets
0.1
Inventories
1.9
7.0
Liquid funds
0.2
–2.2
Current liabilities
–5.1
3.2
Acquisition of Clear Image MMS Ltd
On October 10, 2014 Gunnebo acquired 100% of British company Clear Image
MMS Ltd, which operates in electronic security. The acquired operation has
annual sales of approximately MSEK 60 and 60 employees. The purchase sum
totalled MSEK 36.3. Group goodwill arising from the acquisition has not been
finally established as the acquisition analysis is as yet preliminary. Acquisition
costs, which burdened profit, totalled MSEK 4.1. After the acquisition the company has had sales of MSEK 17.2 and an operating profit of MSEK 0.9.
Clear Image
Financial assets
Inventories
Liquid funds
Current liabilities
14.1
–4.5
–2.1
29.7
Acquisitions in 2013
Acquisition of ATG Entrance Corporation
On July 5, 2013, 100% of ATG Entrance Corporation, the Channel Partner for
Gunnebo’s entrance security products in South Korea, was acquired. The purchase sum totalled MSEK 15.2. Goodwill arising from the acquisition amounted
to MSEK 8.6 and can primarily be attributed to geographic coverage.
ATG Entrance Corporation
Carrying
amount in
Group
1.7
Financial assets
0.3
Inventories
10.4
5.3
Liquid funds
1.0
–4.8
Current liabilities
–7.3
Less:
13.4
–7.9
–9.8
–18.6
Less:
Goodwill
–0.2
2.1
–0.2
22.9
32.0
26.6
36.3
Total purchase sums
Acquisitions of own shares
—
2.0
Total purchase sums
28.8
1.5
Goodwill
Goodwill
Less:
Carrying
amount in
Group
Total purchase sums
6.6
8.6
15.2
–5.8
–1.0
8.4
*Current receivables primarily relate to accounts receivable.
Financial Reporting
Note 31
Note 32
Divestment of operations
Divestment in 2014
Divestment of Fichet-Bauche Télésurveillance
In June 2014, the subsidiary Fichet-Bauche Télésurveillance, which provides
alarm monitoring and call-out services on the French market, was sold to venture capital company Butler Group. The purchase sum after transaction costs
amounted to MSEK 89.6 and the Group capital gain totalled MSEK 73.4.
Assets and liabilities in discontinued operations
2014
2013
Goodwill
5.2
—
0.2
—
6.0
—
Deferred tax assets
0.2
—
Current receivables
12.1
—
Liquid funds
12.7
—
–1.6
—
–18.6
—
16.2
—
Current liabilities
Divested net assets
Capital gains/losses
73.4
—
Purchase sum received after
transaction costs and tax
89.6
—
Liquid funds in discontinued operations
–12.7
—
76.9
—
Personnel
Average number of employees
2014
2013
Sweden
165
181
Australia
73
75
Austria
9
8
Belgium
75
83
Brazil
125
110
Canada
145
147
China/Hong Kong
80
69
Czech Republic
15
16
Denmark
71
76
Finland
7
7
France
968
1,045
Germany
241
262
Hungary
9
9
1,131
1,108
India
Indonesia
830
843
Italy
143
154
Kenya
1
—
Luxembourg
6
7
33
31
Malaysia
Mexico
Netherlands
Norway
97
42
345
305
28
29
Oman
4
—
Poland
42
42
42
Portugal
39
Saudi Arabia
—
1
Singapore
20
19
South Africa
196
187
South Korea
18
5
220
240
38
39
Spain
Switzerland
Turkey
2
1
16
16
UK
238
248
USA
199
209
5,629
5,656
UAE
Total
Of the average number of employees, 868 (859) were female. Women occupy
8% of the senior management positions in the Group. The average number of
employees abroad was 5,464 (5,475).
Costs of personnel
Wages, salaries, other remuneration
and social security charges 2014
Group total
Wages, salaries, other remuneration
and social security charges 2013
Group total
80 Salaries
and other
remuneration
Social security
charges
of which
pension costs
1,502.2
433.6
77.5
Salaries
and other
remuneration
Social security
charges
of which
pension costs
1,413.3
421.3
67.9
Of the above amount, a total of MSEK 57.8 (50.2) was paid in salaries and other
remuneration to Presidents, of which MSEK 6.5 (4.6) consisted of performancerelated pay. Of the Group’s pension costs, MSEK 5.2 (4.5) related to Presidents.
Warrants
Remuneration to senior executives
Remuneration and other benefits for senior executives during the year
Salary
Performancerelated pay
Per Borgvall,
President
4,137
1,843
Other
benefits Pension cost
215
1,435
Total
7,630
Other senior
executives
(7 people)
15,359
6,500
924
5,101
27,884
Total
19,496
8,343
1,139
6,536
35,514
Other benefits relate mainly to housing allowances and company cars.
Pensions, severance pay and performance-related pay
The retirement age for the President is 65. The pension solution is premiumbased and the pension cost amounts to 35% of salary, excluding performancerelated pay. If the President resigns the notice period is 6 months. The President
is entitled to a notice period of 12 months, during which the normal salary and
other benefits shall be paid, in the event of the contract being terminated by
the company. At the end of the notice period, severance pay amounting to one
year’s salary (excluding performance-related pay) shall be paid out in equal
amounts over the course of 12 months.
For other senior executives (seven people who, together with the President,
constitute the Group Executive Team), the notice period is a maximum of one year,
during which full salary and other benefits are payable.
If the senior executive resigns the notice period is 6 months. No severance pay
is awarded.
The retirement age is 65. A premium-based pension plan is in place for senior
executives in Sweden (five people). The agreed premium provision may amount to
a maximum of 35% of the basic salary, depending on age and salary level.
Performance-related pay for the President and other members of the Group
Executive Team is dependent on the achievement of predetermined, quantitative
financial targets and may not exceed 50% of the fixed salary.
Incentive programmes
At the 2010 AGM a share price-related incentive programme was adopted for
senior executives and other key personnel within the Group, which ran up to
2014. The background was that the Board considered it important that these
people have a long-term interest in the good value development of the company share. The 2011 and 2012 AGMs decided to implement similar programmes, and consequently three programmes were running in parallel in
2014.
Warrants
Changes to incentive programmes
Opening balance
Incentive programme 2010
323,000
154,500
146,500
Exercised
–259,403
—
—
Matured
–63,597
—
—
—
154,500
146,500
Closing balance
Gunnebo Annual Report 2014 Incentive programme 2012
President and CEO
30,000
40,000
Other senior executives
25,000
60,000
Other
99,500
46,500
154,500
146,500
Specification of incentive programmes
Remuneration to the Board
During the year remuneration paid to the Board of the parent company
amounted to TSEK 1,910 (1,917), of which TSEK 170 (185) comprises remuneration for committee work. A Board fee of TSEK 475 was paid to Chairman of the
Board Martin Svalstedt. Board fees of TSEK 297.5 and TSEK 287.5 were paid to
Board members Mikael Jönsson and Bo Dankis respectively. A Board fee of TSEK
267.5 per person was paid to Board members Göran Bille and Tore Bertilsson. A
Board fee of TSEK 237.5 was paid to Board member Charlotte Brogren.
SEK '000
Closing balance
At the 2010 AGM, an incentive programme was decided on for 46 senior executives and other key personnel within the Group through an issue of warrants
which entitle the holder to subscribe for new shares in Gunnebo AB. The acquisition price of the warrants was determined using the Black–Scholes valuation
model and amounted to SEK 3.30 per warrant. A warrant gave the holder the
right to subscribe to a share in Gunnebo AB at a price of SEK 32.00 during certain
periods in 2013–2014.
In connection with the 2011 AGM, a new incentive programme was adopted for
49 senior executives, structured along the same principles as the programme
adopted at the 2010 AGM. The market value of the warrants was determined by
an external financial institute using the Black–Scholes valuation model and the
price was set at SEK 6.30 per warrant. A warrant gives the holder the right to
subscribe to a share in Gunnebo AB at a price of SEK 44.20 during certain periods in 2014–2015.
In connection with the 2012 AGM, yet another new incentive programme was
adopted for 50 senior executives. The market value of the warrants was determined externally using the Black–Scholes valuation model and the price was set
at SEK 4.00 per warrant. A warrant gives the holder the right to subscribe to a
share in Gunnebo AB at a price of SEK 31.40 during certain periods in 2015–
2016.
Since the participants in the above incentive programmes have been offered the
opportunity to acquire warrants at market price, the programmes will not entail
payroll costs for accounting purposes according to IFRS 2. Costs in the form of
social security charges may, however, arise in certain countries.
Note 33
Auditors’ remuneration
2014
2013
Remuneration to Deloitte
Auditing
7.0
7.0
Auditing assignments in addition to auditing
0.3
0.1
Tax advice
0.4
0.5
Other services
0.4
0.2
Total remuneration to Deloitte
8.1
7.8
Audit remuneration to other firms of accountants
0.9
0.8
Total auditors’ remuneration
9.0
8.6
Auditing refers to the auditors’ remuneration for the statutory audit. Auditing
assignments in addition to auditing constitute any examination of administration
or financial information resulting from statutes, the Articles of Association, regulations or agreements which result in a report or some other document intended
to form a basis for assessment also for a party other than the ordering client, as
well as advice or other assistance prompted by observations in an auditing assignment. An example of an auditing assignment that is not part of the audit is the
auditors’ general review of an interim report.
Tax advice is self-evident. Other services are advice not related to any of the
previously specified services.
81
Financial Reporting
Note 34
Transactions with related parties
Information on remuneration to Board members is provided in Note 32. Over
and above these, there were no other transactions with related parties.
Not 35
Business risks
Exposure to risk and uncertainty with regard to future development are natural
aspects of all businesses. Risk awareness and good risk management are prerequisites for long-term value creation and for securing good profitability. Gunnebo
therefore continuously evaluates the risks to which the operation is exposed,
and carefully monitors the development of factors that influence the main risks
that have been identified.
Gunnebo is an international group with a broad geographical spread. The
Group currently has operations in 33 countries and production units in 10 countries. The Group is therefore exposed to various kinds of strategic, operational
and financial risk. Strategic and operational risks include business environment
risks, raw material risks, production risks and legal risks.
Risk management within the Group is an important part of the governance
and control of the Group’s operation and aims to identify, evaluate and manage
these types of risk and, thereby, mitigate their potential effects.
The management groups in Gunnebo’s regions and sales companies are
responsible for developing strategies and identifying risks in their market or
area of responsibility. These management groups are supported by resources
within central Group functions such as finance, legal affairs, operations, marketing & service, and human resources and by Group-wide principles, guidelines
and instructions. The Group’s risk management is systematically monitored by
the Group Executive Team, partly through a system of monthly reports whereby
the management groups describe developments in their respective units, along
with identified risks. Further control is achieved through the inclusion of representatives of the Group Executive Team on internal boards. The President
reports continuously to the Board of Directors about the development of the
Group’s risks, and Gunnebo’s Board has overall responsibility for the Group’s risk
management and for deciding the Group’s strategic direction.
Market risks
The Gunnebo Group’s operation and results are exposed to market risks such as
the impact of the business cycle on demand for the Group’s products and services, and changes in customers’ investment plans and production levels. The
Group’s relatively broad product range and customer structure, as well as its
global market coverage with sales and production in a large number of countries, provide a good distribution of risk intended to restrict the effect of a
change in demand limited to a particular industry, region or country.
The operation’s geographical distribution naturally entails exposure to business environment risks such as country-specific risks in the form of political
decisions and changes to regulations.
Raw material risks
The Gunnebo Group is exposed to risks related to supply and price variations of
raw materials and components. Competition on the market may restrict the
opportunity to fully offset cost increases through price rises, even though the
Group endeavours to enter sales agreements which allow the price increases to
be passed on to customers.
Steel is the single largest raw material component in the Group. The Group
purchases many different types and grades of steel on different markets, resulting in differentiated price development. With the aim of limiting the short-term
effect of price fluctuations, a large part of the Group’s steel requirement is purchased via index-based contracts.
Risks related to the Group’s purchases of more important input goods are
managed by co-ordinating and controlling procurement through a central purchasing function, which for instance appoints people responsible for certain
categories of raw materials or components.
Production risks
Gunnebo’s production operation takes place in 12 production units and comprises a chain of processes where stoppages or disruptions can have conse-
82 quences on Gunnebo’s ability to fulfil its obligations to customers. Gunnebo
deals with risks relating to the Group’s property and operational stoppages
through a programme for identifying and assessing such risks. The programme
is applied at all of Gunnebo’s production plants and aims to prevent these types
of risks or, if an event is beyond Gunnebo’s control, to mitigate the consequences.
The majority of components used in the Group’s products are sourced from
subcontractors. With the aim of minimising the risk of one of these subcontractors being unable to deliver the component, or to deliver on time, for any reason,
Gunnebo actively strives to secure alternative suppliers for critical components.
There is, therefore, usually more than one subcontractor that can deliver a particular component. Furthermore, the Group’s purchasing function works
actively and continuously to evaluate and analyse the Group’s suppliers from a
risk perspective, for example.
Environmental impact primarily takes place in the production process
through material and energy consumption, emissions to air and water, and the
creation of noise and waste. To restrict the environmental impact of production, the Group has the objective to gain ISO 14001 certification for all production units. Risk analyses are carried out in connection with such certification
and through chemical analyses during, for example, REACH work (Registration,
Evaluation, Authorisation and restriction of Chemicals). These risk analyses provide good information about the various risks at the production plants, and relevant programmes of measures can therefore be implemented.
One of the Gunnebo Group’s goals is to grow. Growth shall be organic but supplemented by acquisitions. The aim is to carry out more acquisitions on certain
defined markets on an ongoing basis. Acquisitions can entail various difficulties
integrating the acquired operation, which can lead to far higher costs for the
acquisition than estimated and/or that the synergies take longer to realise than
planned.
Acquisitions that do not develop as planned may also lead to high writedown costs for goodwill and other intangible assets, which can have a significant adverse effect on the Group’s results and financial position.
The acquisition process is conducted in accordance with set instructions and
guidelines. The Group’s function for Mergers & Acquisitions has overall responsibility for evaluating and implementing acquisitions, and for ensuring that the
established integration plans are carried out.
Legal risks
The legal affairs department within the Group is responsible for monitoring and
controlling the management of legal risks within Gunnebo. A Group-wide legal
policy has been introduced which states, for example, that some matters of a
legal nature must be escalated to the legal affairs department. This includes
stock exchange related issues, competition law issues and issues relating to the
Group’s intangible assets. With the aim of eliminating unwanted risks in the
Group’s customer and supplier agreements and to ensure the quality of these
agreements, instructions and guidelines have been issued on the more important agreement terms, such as those relating to liability and limitations on liability. Furthermore, the Group’s business areas have access to agreement templates for the more common types of agreement. In addition to the above, there
are also procedures for approving agreements.
As a result of standard business operations, Gunnebo is a party in various
legal disputes. These disputes include, for example, commercial disputes and
disputes regarding tax or labour law. Such outstanding and potential disputes
are reported regularly to the Group’s legal affairs department. Disputes can last
a long time and entail high costs. It can also be hard to predict the outcome of
many disputes. A negative outcome in one particular dispute could have an
important negative impact on the Group’s results and financial position. At the
end of 2014, there were not deemed to be any disputes that could entail such
an effect.
Insurable risks
Gunnebo has established a Group-wide insurance programme to protect the
Group’s insurable assets and interests. The programme covers property and loss
of profit insurance, general liability and product liability, transport insurance,
crime against property as well as claims for damages against the Board and senior executives, for example. Linked to the insurance programme is a programme
for identifying and evaluating risks related to physical damage at the Group’s
Notes – Parent Company
production plants and related financial consequences. The results of these
reviews are summarised in a points system for risk exposure at each plant, enabling the management to control the risks and to assess the need for risk-reduction measures and establish priorities among these.
Profit is affected by changes in certain factors of importance to the Group, as
explained below. The calculation is made on the basis of the Group’s structure
at the year-end and assuming all other factors remain unchanged.
Selling prices
A 1% change in selling prices affects income and operating profit by approximately MSEK 56.
Labour costs
A 1% change in labour costs, including social security charges, affects operating
profit by approximately MSEK 19.
Steel prices
Steel is the single largest raw material component in the Group. Steel purchases
span many different types and grades, resulting in differentiated price development. A general change in the steel price of 10% affects profits by around MSEK
30 for the subsequent 12 months.
Note 36
Events after the closing day
No significant events have occurred since the closing day, except that Henrik
Lange has been appointed President and CEO.
Note 37
Operating expenses allocated by type of cost
2014
2013
Remuneration for employees
68.3
49.3
Temporary personnel and subcontractors
57.6
68.0
Vehicle and travel costs
8.6
9.3
2.3
4.7
Other costs
Total operating costs
Note 38
67.1
15.8
203.9
147.1
2014
2013
Profit/loss from participations in Group companies
Dividends
Liquidation of subsidiaries
Total
49.0
—
—
–0.3
49.0
–0.3
Interest income
Interest income, external
0.2
0.7
Total
0.2
0.7
Interest expenses
Interest expenses, Group companies
–18.1
–14.1
Total
–18.1
–14.1
—
–0.1
Total
—
–0.1
2014
2013
Note 39
Appropriations
Group contributions received
Group contributions paid
Total
Note 40
84.0
—
–37.0
–90.0
47.0
–90.0
Taxes
2014
2013
Current tax
–3.4
–3.3
Deferred tax
–10.4
—
Total
–13.8
–3.3
Deferred tax assets of MSEK 120.3 (130.7) relate entirely to loss carry-forwards.
Financial Reporting
Note 41
Intangible assets
2014
2013
Opening cost
24.3
23.2
Capital expenditure
2.2
1.4
—
–0.3
26.5
24.3
Opening amortisation
18.6
14.9
—
–0.3
Sales/disposals
Sales/disposals
Amortisation
Closing accumulated amortisation
Note 42
1.8
4.0
20.4
18.6
6.1
5.7
Equipment
2014
2013
Opening cost
6.4
6.4
Capital expenditure
0.1
—
6.5
6.4
Opening depreciation
4.0
3.3
Depreciation
0.4
0.7
Closing accumulated depreciation
4.4
4.0
2.1
2.4
2014
2013
1,595.3
1,562.6
Note 43
Opening book value
Shareholder contributions paid
—
40.0
Liquidation of subsidiaries
—
–7.3*
1,595.3
1,595.3
Closing book value
*Relates to liquidation of Gunnebo Treasury SA.
Specification of shares in subsidiaries
Gunnebo Holding GmbH
Gunnebo Holding ApS
Gunnebo India Pvt. Ltd.
Hidef Industri AB
Gunnebo Entrance Control AB
Gunnebo Holding AB
Gunnebo Nordic AB
Country
code
100
Garching
DE
0.1
100
Skovlunde
DK
91.4
115.5
Holding, %
1
1,000
Corporate identity number (SE)
Book value
8,059,880
100
Mumbai
IN
1,000
100
556465-2757
Gothenburg
SE
0.1
48,000
100
556086-5403
Gothenburg
SE
8.5
1,000
100
556573-7508
Gothenburg
SE
90.0
251,000
100
556041-2362
Gothenburg
SE
388.3
1.3
Gunnebo Sverige AB
5,500
100
556095-6509
Gothenburg
SE
Gunnebo SafePay AB
1,000
100
556621-4721
Gothenburg
SE
0.1
Gunnebo Treasury AB
1,000
100
556465-2765
Gothenburg
SE
900.0
Total
84 Reg. office
No. of shares
1,595.3
Subsidiaries’ holdings in Group companies
Holding, %
Gunnebo Middle East FZE
Gunnebo Australia Pty Ltd
Gunnebo Österreich GmbH
100
100
100
Gunnebo Belgium SA/NV
Gunnebo Gateway Brasil S.A.
Gunnebo Gateway Brasil Servicos Ltda
Gunnebo Canada Inc.
Gunnebo (Suisse) SA
Gunnebo Security (China) Co. Ltd.
Gunnebo CZ s. r. o.
Gunnebo Cash Automation GmbH
Gunnebo Deutschland GmbH
Gunnebo Logistics GmbH
Gunnebo Markersdorf GmbH
Rosengrens GmbH
A/S Gunnebo Nordic
Fichet Industria SL
Gunnebo España SA
Gunnebo Nordic Oy
Gunnebo Bazancourt SAS
Gunnebo Electronic Sécurité SAS
Gunnebo France SAS
SCI route de Schwobsheim
Clear Image MMS Ltd
Clear Image Group LLP
FBH Fichet Ltd
Gunnebo Entrance Control Ltd
Gunnebo UK Ltd
Gunnebo Magyarország Kft.
Gunnebo Hong Kong Ltd.
PT Chubb Safes Indonesia
Gunnebo Services India Pvt. Ltd.
Gunnebo Entrance Control S.p.A.
Gunnebo Italia S.p.A.
Gunnebo Korea Co. Ltd.
Gunnebo Luxembourg SARL
Diseños Inteligentes de Seguridad S.A. de C.V.
Gunnebo México S.A. de C.V
Gunnebo Malaysia Sendirian Berhad
100
80
100 *
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
49
100
100
100
100
100
100
100
100
100
100
100 **
85
100
Gunnebo Doetinchem BV
Gunnebo Holding Nederland BV
Gunnebo Nederland BV
Gunnebo Nederland Technical BV
Gunnebo Nordic AS
Gunnebo Polska Sp. z.o.o.
GAT – Comercializacao de Sistemas de Proteccao Electronica LDA
Gunnebo Portugal SA
Gunnebo Cash Automation AB
Gunnebo Gateway AB
Gunnebo Mora AB
Prodimo AB
Gunnebo Singapore Pte Ltd.
Gateway Security Inc.
100
100
100
100
100
100
55
100
100
100
100
48
100
100
Gunnebo Entrance Control Inc.
Gunnebo Security Inc.
Hamilton Products Group, Inc.
Hamilton Safe Co.
Safe LLC
Kaaa/Hamilton Enterprises, Inc.
All Technologies Access and Parking (Pty) Ltd
Gunnebo South Africa (Pty) Ltd
100
100
100
100
100
31
100
100
Corporate identity number (SE)
556533-2078
556480-7641
556009-9458
556653-3153
Reg. office
Country
code
Dubai
Bella Vista
Ansfelden
AE
AU
AT
Brussels
Cotia
Cotia
Barrie
Geneva
Kunshan City
Prague
Trier
Garching
Hildesheim
Markersdorf
Garching
Skovlunde
Barcelona
Barcelona
Vantaa
Versailles
Colmar
Velizy
Colmar
Batley
Batley
Hitchin
Uckfield
Wolverhampton
Budapest
WanChai
Jakarta
New Delhi
Trento
Milan
Seoul
Schifflange
Monterrey
Mexico City
Kuala Lumpur
BE
BR
BR
CA
CH
CN
CZ
DE
DE
DE
DE
DE
DK
ES
ES
FI
FR
FR
FR
FR
GB
GB
GB
GB
GB
HU
HK
ID
IN
IT
IT
KR
LU
MX
MX
MY
Arnhem
Doetinchem
Amsterdam
Rotterdam
Oslo
Kalisz
Lisbon
Lisbon
Gothenburg
Motala
Mora
Motala
Singapore
Florida
NL
NL
NL
NL
NO
PL
PT
PT
SE
SE
SE
SE
SG
US
California
Florida
Ohio
Ohio
Delaware
Ohio
Johannesburg
Johannesburg
US
US
US
US
US
US
ZA
ZA
*The company is a wholly-owned subsidiary of Gunnebo Gateway Brasil S.A. in which Gunnebo has a participating interest of 80%.
**The company is a wholly-owned subsidiary of Gunnebo México S.A. de C.V in which Gunnebo has a participating interest of 85%.
Financial Reporting
Note 44
Note 49
2014
2013
0.7
0.6
Prepaid rent
Other items
2.6
3.4
Total
3.3
4.0
Note 45
Holiday pay liability
2013
5.9
5.0
Social security charges
15.2
11.9
Accrued salaries
10.3
2.3
4.5
2.0
35.9
21.2
Other items
Total
Note 46
Salaries, other remuneration and
social security charges 2014
Salaries
and other
remuneration
Social security
charges
of which
pension costs
42.7
25.6
9.6
Salaries
and other
remuneration
Social security
charges
of which
pension costs
30.5
18.8
7.3
Total
Salaries, other remuneration and
social security charges 2013
Total
Information on remuneration to senior executives and the Board is provided in
Note 32.
2014
2013
Guarantees*
1,317.5
1,310.3
Total
1,317.5
1,310.3
*Refers to guarantees for subsidiaries and associated companies.
Note 47
In the 2014 financial year, the average number of parent company employees
was 33 (31), of whom 15 were female (15).
There is one woman on the Board of the parent company and one in the
executive management team.
Costs of personnel
2014
Personnel
Note 50
Auditors’ remuneration
2014
2013
Remuneration to Deloitte
Operating lease contracts
Leased assets
Future payment commitments for operating lease contracts have the following
breakdown:
2015
3.1
2016
2.5
2017
0.7
2018
0.0
2019
—
2020 and later
—
Total
6.3
Auditing
1.0
1.2
Auditing assignments in addition to auditing
0.1
0.0
Tax advice
0.1
0.1
Other services
0.3
0.1
Total remuneration to Deloitte
1.5
1.4
Auditing assignments in addition to auditing constitute any examination of
administration or financial information resulting from statutes, the Articles of
Association, regulations or agreements which result in a report or some other
document intended to form a basis for assessment also for a party other than
the ordering client, as well as advice or other assistance prompted by observations in an auditing assignment. An example of an auditing assignment that is
not part of the audit is the auditors’ general review of an interim report.
Tax advice is self-evident. Other services are advice not related to any of the
previously specified services.
Leasing costs at the parent company amounted to MSEK 3.4 (2.8).
Note 48
Note 51
2014
Interest received
Interest paid
Dividends received
Dividend in connection with
liquidation of subsidiaries
Other items affecting cash flow
Total
86 2013
0.2
0.7
–18.0
–16.1
49.0
—
—
7.0
—
–0.1
31.2
–8.5
Current liabilities to Group companies
The company is part of Gunnebo Treasury AB’s Group account system whereby
the company’s authorised credit amounts to MSEK 237.4. The liability at the end
of the year totalled MSEK 28.8 and is net accounted in the item Current liabilities to Group companies.
Note 52
Transactions with related parties
Of the parent company’s net sales, 100% (100%) related to Group companies,
while purchases from Group companies accounted for 20% (26%) of the total.
Information on remuneration to Board members is provided in Note 32. Over
and above these, there were no other transactions with related parties.
Unrestricted equity in the parent company at the disposal of the Annual
General Meeting:
Share premium reserve
The Board of Directors proposes:
448.3
–4.4
that a dividend of SEK 1.00 per share be paid to
shareholders*
76.2
120.5
and that the remaining sum be carried forward
488.2
Total
564.4
Total
564.4
Retained earnings
*For Euroclear Sweden AB-registered owners, the proposed record date for dividend payment is
April 17, 2015. The number of dividend-bearing shares on the record day is expected to total
76,173,501.
Board statement: The Board has proposed that a dividend of SEK 1.00 per share be paid, i.e.
a total of approximately MSEK 76. As a result of the dividend, unrestricted equity will
change as shown above. The company and the Group are in a good position. There is more
than enough scope for the proposed dividend in unrestricted equity. The equity ratio and
liquidity will continue to be satisfactory after the proposed dividend. Considering this, the
information in the Board of Directors’ report and what is otherwise known by the Board, the
Board deems the proposed dividend justified with regard to the requirements placed by the
operation’s nature, scope and risks on the size of the company’s and Group’s equity and on
the company’s and Group’s consolidation requirements, liquidity and position in general.
None of the parent company equity on the closing day depends on assets and liabilities
being measured at fair value according to Chapter 4 §14 of the Annual Accounts Act.
The Board and the President hereby give their assurance that the consolidated financial statements have been prepared in accordance with the International Financial
Reporting Standards (IFRS), as adopted by the EU, and that they provide a true and fair view of the financial position and results of the Group. The annual accounts have
been prepared in accordance with generally accepted accounting principles and thus provide a true and fair view of the financial position and results of the Parent Company. The Board of Directors’ Report for the Group and the Parent Company provides a true and fair view of the Group’s and Parent Company’s operations, financial positions and results and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.
This annual report is a translation of the original report in Swedish, which has been audited by the company’s auditors.
Martin Svalstedt
Chairman
Tore Bertilsson
Board member
Göran Bille
Board member
Charlotte Brogren
Board member
Bo Dankis
Board member
Irene Thorin
Board member
Per Borgvall
President and CEO
Crister Carlsson
Board member
Mikael Jönsson
Board member
Our audit report was submitted on March 5, 2015
Deloitte AB
Gunnebo Annual Report 2014 Jan Nilsson
87
Financial Reporting
Auditor’s Report
This auditor´s report is a translation of the Swedish language original.
In the events of any differences between this translation and the Swedish
original the latter shall prevail.
To the annual meeting of the shareholders of Gunnebo AB (publ)
Corporate identity number 556438-2629
Report on the annual accounts and the consolidated accounts
We have audited the annual accounts and consolidated accounts of Gunnebo
AB for the financial year January 1, 2014 to December 31, 2014. The annual
accounts and consolidated accounts of the company are included in the printed
version of this document on pages 48–87.
The responsibilities of the Board of Directors and the Managing Director for the annual
accounts and consolidated accounts
The Board of Directors and the Managing Director are responsible for the preparation and fair presentation of these annual accounts in accordance with the
Annual Accounts Act and of the consolidated accounts in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual
Accounts Act, and for such internal control as the Board of Directors and the
Managing Director determine is necessary to enable the preparation of annual
accounts and consolidated accounts that are free from material misstatement,
whether due to fraud or error.
Annual Accounts Act. The consolidated accounts have been prepared in accordance with the Annual Accounts Act and present fairly, in all material respects,
the financial position of the Group as of December 31, 2014 and of its financial
performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the EU, and the Annual
Accounts Act. The statutory administration report is consistent with the other
parts of the annual accounts and consolidated accounts.
We therefore recommend that the annual meeting of shareholders adopt the
income statement and balance sheet for the Parent Company and the Group.
Report on other legal and regulatory requirements
In addition to our audit of the annual accounts and consolidated accounts, we
have also audited the proposed appropriations of the company’s profit or loss
and the administration of the Board of Directors and the Managing Director of
Gunnebo AB for the financial year January 1, 2014 – December 31, 2014.
Responsibilities of the Board of Directors and the Managing Director
Auditors’ responsibility
Our responsibility is to express an opinion on these annual accounts and consolidated accounts based on our audit. We conducted our audit in accordance with
International Standards on Auditing and generally accepted auditing standards
in Sweden. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether
the annual accounts and consolidated accounts are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the annual accounts and consolidated accounts.
The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the annual accounts and
consolidated accounts, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the company’s
preparation and fair presentation of the annual accounts and consolidated
accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the Board of Directors and the Managing Director, as well as
evaluating the overall presentation of the annual accounts and consolidated
accounts.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
The Board of Directors is responsible for the proposal for appropriations of the
company’s profit or loss, and the Board of Directors and the Managing Director
are responsible for administration under the Companies Act.
Auditors’ responsibility
Our responsibility is to express an opinion with reasonable assurance on the
proposed appropriations of the company’s profit or loss and on the administration based on our audit. We conducted the audit in accordance with generally
accepted auditing standards in Sweden.
As a basis for our opinion on the Board of Directors’ proposed appropriations
of the company’s profit or loss, we examined the Board’s substantiating statement and a selection of the relevant documentation to ascertain whether the
proposal is in accordance with the Companies Act.
As a basis for our opinion concerning discharge from liability, in addition to
our audit of the annual accounts and consolidated accounts, we examined significant decisions, actions taken and circumstances of the company in order to
determine whether any member of the Board of Directors or the Managing
Director is liable to the company. We also examined whether any member of
the Board of Directors or the Managing Director has, in any other way, acted in
contravention of the Companies Act, the Annual Accounts Act or the Articles of
Association.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
Opinions
In our opinion, the annual accounts have been prepared in accordance with the
Annual Accounts Act and present fairly, in all material respects, the financial
position of the Parent Company as of December 31, 2014 and of its financial
performance and its cash flows for the year then ended in accordance with the
We recommend to the annual meeting of shareholders that the profit be appropriated in accordance with the proposal in the statutory administration report
and that the members of the Board of Directors and the Managing Director be
discharged from liability for the financial year.
Deloitte AB
Jan Nilsson
Information for the Capital Market
Gunnebo strives to give all stakeholders as fair a view as possible of the Group’s
business and financial results. The goal is to provide owners and the stock
market with information that supports these parties in the process of evaluating
Gunnebo’s business.
Gunnebo’s objective is to provide the market with open, consistent
and transparent financial information. All external and internal communication shall be fair and appropriate. Relevant information shall be
made accessible to all stakeholders simultaneously and at the promised time.
Communication in the form of reporting to various authorities,
financial reporting and information for employees takes place in accordance with external rules and requirements, the Group’s internal
governing documents as well as Gunnebo’s IR and communication
policy.
Information channels
Gunnebo AB’s website www.gunnebogroup.com contains publications, financial information, press releases, and information about
Gunnebo’s organisation and offering.
Owners
Shareholders are asked what information they would like to see from
the company and therefore make an active choice in receiving the required information. The information channels available to shareholders are interim reports and annual reports, as well as the customer
magazine Global and the website. Shareholders can also participate at
Gunnebo’s Annual General Meeting.
Questions may be sent directly to info@gunnebo.com or submitted by telephone on +46 (0)10-209 50 00. It is also possible to order
printed annual reports and interim reports from the Group head
office on +46 (0)10-209 50 00, from the website or via the above
e-mail address.
Stock market
Gunnebo’s aim is always to be available to respond to questions from
the stock market. Questions about the company’s operations are primarily answered by Gunnebo’s President and CEO, the Chief Financial
Officer and the IR department. There is also detailed information about
both the Group’s operations and its financial results on the Group website, www.gunnebogroup.com.
Annual General Meeting
Gunnebo’s Annual General Meeting will be held at 4:00pm CET on
Wednesday April 15, 2015 at the Chalmers Student Union building,
Chalmersplatsen 1, Gothenburg, Sweden.
Registration
Shareholders who wish to participate in the Annual General Meeting
must have their names entered in the register of shareholders maintained by Euroclear Sweden by no later than Thursday April 9, 2015, and
must notify the AGM of attendance by no later than Thursday April 9,
2015, preferably before 4:00pm CET, either online at the Group’s website, www.gunnebogroup.com, by post to Gunnebo AB, Box 5181,
SE-402 26 Gothenburg, by fax on +46 (0)10-209 50 10, or by phone on
+46 (0)10-209 50 00. Shareholders whose shares are registered in nominee names must, if they wish to exercise their right to vote at the AGM,
have their shares re-registered in their own names by April 9, 2015.
Dividend
The Board and the President propose to the AGM a dividend of SEK
1.00 (SEK 1.00) per share for the 2014 financial year.
Invitation to the 2015 Annual General Meeting
Gunnebo’s Annual General Meeting will be held at 4.00 pm CET on Wednesday April
15, 2015 at the Chalmers Student Union building, Chalmersplatsen 1, Gothenburg,
Sweden.
than Thursday April 9, 2015, preferably before 4:00pm CET, either online at www.
gunnebogroup.com, by post to Gunnebo AB, Box 5181, SE-402 26 Gothenburg, or by
fax on +46 (0)10-209 50 10, or by phone on +46 (0)10-209 50 00.
Registration
Shareholders who wish to participate in the Annual General Meeting must have their
names entered in the register of shareholders maintained by Euroclear Sweden by no
later than Thursday April 9, 2015, and must notify the AGM of attendance by no later
Shareholders whose shares are registered in nominee names must, if they wish to
exercise their right to vote at the AGM, have their shares re-registered in their own
names by April 9, 2015.
Capital Market
IR policy
Financial goals
The goal of Gunnebo’s IR activities is, through communication activities, to help give all stakeholders as fair a picture as possible of the
Group’s business and financial results.
In addition to day-to-day communications, contact takes place with
the finance market in connection with the interim reports and the
AGM, and through meetings with analysts, investors and journalists
at seminars or individual meetings. Trustful contact with the market’s
various stakeholders presupposes a smoothly functioning internal
reporting system that provides fast, accurate reporting from all the
Group’s business.
Gunnebo keeps important financial information secret until it is
disclosed – simultaneously and consistently – to the stock market
and to NASDAQ Stockholm. All external financial information about
Gunnebo is handled centrally. Financial interim reports are commented on by the President and CEO, and the Chief Financial Officer. One of
these people is always available in connection with the publication of
interim reports.
Confidence in the Gunnebo share is based on compliance with
NASDAQ Stockholm’s rules for listed companies and on Gunnebo’s ability and willingness to provide clear, relevant information to the market.
Gunnebo’s financial goals have remained unchanged since 2005.
G
unnebo shall earn a long-term return on capital employed of at
least 15% and an operating margin of at least 7%
T
he Group shall achieve organic growth of at least 5%
T
he equity ratio shall not fall below 30%
Activities 2014
In 2014, Gunnebo held individual analyst meetings with, for example,
the analysts that follow Gunnebo: Carnegie, SEB and Swedbank. During the year telephone conferences and face-to-face meetings were
also held with analysts. On March 5, Gunnebo held its Capital Market
Day in Stockholm, Sweden for analysts, fund managers, investors and
journalists.
The company also participated in seminars, breakfasts, lunch and
dinner meetings, as well as several shareholder meetings. After each
interim report Gunnebo arranges a telephone conference to present
the financial results. The conference is recorded and the recording is
made available via the website.
Analysts Following Gunnebo
Carnegie
Investment Bank AB
Fredrik Villard
+46 8 676 88 00
fredrik.villard@carnegie.se
SEB Equity Research
Olof Larshammar
+46 8 522 295 00
olof.larshammar@seb.se
90 Swedbank Markets
Mats Liss
+46 8 585 900 00
mats.liss@swedbank.se
The capital structure of the Group
One of Gunnebo’s long-term financial goals is to have an equity ratio
of no less than 30%. The equity ratio at the end of the year was 35%.
Another of Gunnebo’s aims is to achieve a return of at least 15% on
capital employed.
Gunnebo’s borrowing is mostly unsecured. Borrowing is limited, however, by financial obligations in the loan agreements in the form of
covenants. These mainly relate to the key ratios of interest coverage
ratio and net debt/EBITDA. The Group’s long-term credit framework
on December 31, 2014 amounted to MSEK 1,510 and ensures that
financing is available on market terms until the end of February 2019.
Dividend policy and proposed dividend
The Board’s dividend proposal shall take into account Gunnebo’s longterm development potential, its financial position and its investment
needs. The Board has decided that the target for the dividend is that
in the long term it shall amount to 30–40% of the profit after tax. The
proposed dividend for 2014 is SEK 1.00 per share.
Financial Information and
Reports 2015
April 15, 2015
October 21, 2015
Annual General Meeting 2015
Interim Report
January–September 2015
April 28, 2015
Interim Report
January–March 2015
February 4, 2016
2015 Year-End Release
July 17, 2015
Interim Report
January–June 2015
Investor Relations Website
Visit www.gunnebogroup.com to access previous financial
reports, presentations, financial statistics and share data, as well as
information about corporate governance and the Group in general.
Subscription to
interim reports,
annual reports
and press releases
Risk analysis
Share price and
its development
Financial results
and related
material
Financial calendar
Press releases
Contact
information
Latest annual
report and
archived reports
91
Capital Market
The Gunnebo Share
The Gunnebo share has been listed on Stockholm Stock Exchange since 1993, and can be
found on the NASDAQ Stockholm in the Mid Cap segment and the Industrials sector. The
abbreviated name is GUNN and the ISIN code is SE0000195570.
At the end of 2014 Gunnebo had 12,000 shareholders. The percentage
of foreign ownership amounted to 11%. 15% of the share capital was
owned by Swedish natural persons, which means that 85% was owned
by legal entities or foreign natural persons.
Share capital and votes
On December 31, 2014 Gunnebo had a share capital of MSEK 380.9
divided into 76,173,501 shares, each with a quota value of SEK 5. All
shares have equal voting rights and share equally in the company’s
assets and earnings.
Share price
At the end of the year the Gunnebo share was trading at SEK 37.7,
which is a decrease during the year of 6%. During the same period,
Stockholm Stock Exchange’s OMX 30 index increased by 10%. The
lowest share price paid during the year was SEK 33.3 (February 5 and 6)
and the highest was SEK 43.7 (July 17).
Trading and market value
A total of 25,822,152 shares (26,165,851) were traded in 2014 at a
value corresponding to MSEK 988 (806). The average volume traded
each trading day was 103,703 shares (104,663), equating to TSEK 3,966
(3,222). The market value on December 30, 2014 was MSEK 2,872.
The Gunnebo share 2014
50
1,400
40
1,200
1,000
800
600
400
200
30
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
0
©NASDAQ OMX
The Gunnebo share 2010–2014
60
40
6,000
5,000
4,000
20
3,000
2,000
1,000
0
2010
2011
2012
2013
0
2014
©NASDAQ OMX
Share/SEK
92 OMX Stockholm_PI
Trading (no. of shares in thousands)
Largest shareholders, grouped
Stena Adactum
Vätterledens Invest, with associates
IF Skadeförsäkringar
Didner & Gerge Funds
NTC Various Fiduciary Capacit
Avanza Pension
4th AP Fund
DnB Carlson Funds
Skandia Funds
Muirfield Invest
BP2S London/Henderson OEIC
Swedbank Robur Funds
NordNet pension insurance
Örgryte Industri AB
DFA International Small Cap
State Street Bank
Handelsbanken Funds
Other
Total
No. of shares Proportion, %
19,852,329
14,977,913
8,849,114
1,839,693
1,743,592
1,700,012
1,373,131
1,199,073
829,086
750,000
617,290
501,810
404,554
402,000
395,710
378,336
361,701
19,998,157
76,173,501
26.1
19.7
11.6
2.4
2.3
2.2
1.8
1.6
1.1
1.0
0.8
0.7
0.5
0.5
0.5
0.5
0.5
26.2
100.0
Earnings per share
after dilution
Equity per share
SEK
SEK
4
30
3
20
2
10
1
10
11
12
13
No. of shares
Holding and
votes, %
7,499
2,066
1,938
1,389,736
1,716,080
4,532,461
1.8
2.3
5.9
5,001–10,000
10,001–20,000
20,001–
Total
242
98
157
12,000
1,819,853
1,421,714
65,293,657
76,173,501
2.4
1.9
85.7
100.0
Changes in share
capital, MSEK
Change
Share capital
Total no. of
shares
+96
+50
+3
+10
+4
+27
+4
+2
0
+6
+6
0
+7
0
0
+4
+5
+151
+1
+1
4
4
100
150
153
163
167
194
198
200
200
206
212
212
219
219
219
223
228
379
380
381
4,000
400,000
10,000,000
15,000,934
15,280,783
16,275,819
16,715,819
19,351,121
19,813,150
19,973,150
19,982,310
20,625,881
21,204,528
21,211,198
21,889,974
43,779,948
43,854,548
44,578,523
45,513,359
75,855,598
75,914,098
76,173,501
Shareholders by size
1–500
501–1,000
1,001–5,000
1991 Formation
1992 Split 100:1
1992 New share issue
1995 Conversion
1996 Conversion
1997 Conversion
1998 Conversion
1999 Conversion
2000 Conversion
2001 Conversion
2003 Conversion
2004 Split 2:1
12
13
Divended per share
Cash flow per share
SEK
SEK
14
4.0
1.5
3.0
1.0
2.0
1.0
0.5
No. of
shareholders
10
14
10
11
12
13
14 *)
10
11
12
13
14
–1.0
*) Board proposal
No. of shares
Closing no. of shares,
x 1,000
Average number of
shares, x 1,000
Data per share
Earnings per share after
dilution, SEK
2014
2013
2012
2011
2010
76,174
75,914
75,856
75,856
75,856
75,979
75,863
75,856
75,856
75,856
2014
2013
2012
20111)
20101)
2.98
1.29
0.26
3.00
2.35
21.93
19.06
20.02
23.24
21.17
Free cash flow per share,
SEK
2.94
1.90
0.28
–0.31
0.87
Dividend, SEK2)
1.00
1.00
1.00
1.00
0.50
Share price related
share data
2014
2013
2012
2011
2010
Share price at year-end
(last price paid), SEK
37.70
40.00
24.50
24.00
53.00
Highest price during the year
(price paid), SEK
43.70
40.90
39.40
54.75
53.50
Lowest price during the year
(price paid), SEK
33.30
24.00
23.30
21.20
25.10
Market value at year-end,
MSEK
4,020
Equity per share, SEK
2,872
3,037
1,858
1,821
P/E ratio, times
13
31
94
8
23
Dividend yield, %2)
2.7
2.5
4.1
4.2
0.9
1) The figures have not been recalculated as a result of the revised standard IAS 19
Employee Benefits.
2) The Board proposes a dividend of SEK 1.00 per share for the year 2014.
93
Capital Market
Five-Year Review
2014
2013
2012
20111)
20101)
5,557
–3,911
1,646
–1,294
352
–35
317
–90
227
5,271
–3,689
1,582
–1,360
222
–75
147
–45
102
5,236
–3,666
1,570
–1,391
179
–66
113
–89
24
5,137
–3,572
1,565
–1,241
324
–27
297
–52
245
5,263
–3,723
1,540
–1,343
197
–75
122
–41
81
–14
–84
–87
7
–127
Margins, excl. items of a non-recurring nature
Gross margin, %
Operating margin before depreciation, (EBITDA), %
Operating margin (EBIT), %
Profit margin (EBT), %
30.2
8.2
6.6
6.0
30.6
7.4
5.8
5.2
30.3
6.9
5.1
4.7
30.8
7.7
6.2
5.7
30.2
7.7
6.1
4.7
Margins, incl. items of a non-recurring nature
Gross margin, %
Operating margin before depreciation, (EBITDA), %
Operating margin (EBIT), %
Profit margin (EBT), %
29.6
7.9
6.3
5.7
30.0
5.9
4.2
2.8
30.0
5.2
3.4
2.2
30.5
7.9
6.3
5.8
29.3
5.3
3.7
2.3
97
5,433
78
88
5,629
97
5,514
72
84
5,656
97
5,250
116
87
5,563
96
5,091
85
81
5,315
96
5,271
71
82
5,248
Income statement, MSEK
Net sales
Cost of goods sold
Gross profit
Other operating expenses, net
Operating profit2)
Net financial items
Taxes
2) Of which items of a non-recurring nature
Other information
Foreign sales ratio, %
Order intake, MSEK
Capital expenditure, MSEK
Depreciation, MSEK
1) The figures have not been recalculated as a result of the revised standard IAS 19 Employee Benefits.
2014
2013
2012
20111)
20101)
Balance sheet, MSEK
Intangible assets
Financial assets
Deferred tax assets
Inventories
Current receivables
Liquid funds
Total assets
1,675
304
16
339
694
1,350
447
4,825
1,494
304
17
307
609
1,212
392
4,335
1,502
327
60
263
580
1,201
350
4,283
1,215
316
139
253
564
1,239
239
3,965
1,048
367
94
241
543
1,253
189
3,735
Equity
Current liabilities
Total equity and liabilities
1,694
1,449
1,682
4,825
1,463
1,274
1,598
4,335
1,533
1,428
1,322
4,283
1,776
800
1,389
3,965
1,606
639
1,490
3,735
Cash flow statement, MSEK
246
25
271
218
–7
211
156
–20
136
234
–169
65
177
–32
145
Free cash flow, MSEK
Free cash flow
223
144
21
–23
66
Returns,
excl. items of a non-recurring nature
Return on capital employed, %
Return on equity, %
12.6
15.6
10.7
15.6
10.2
9.7
13.2
13.7
13.5
14.3
Returns,
incl. items of a non-recurring nature
Return on capital employed, %
Return on equity, %
12.1
14.7
7.9
6.9
7.0
1.5
13.5
14.1
12.3
12.2
1.8
35
9.6
0.6
1.8
34
5.3
0.7
1.9
36
5.4
0.7
2.3
45
18.0
0.3
2.5
43
5.0
0.3
Share data
Earnings per share before dilution, SEK
Equity per share, SEK
Free cash flow per share, SEK
Dividend, SEK2)
2.98
2.98
21.93
2.94
1.00
1.29
1.29
19.06
1.90
1.00
0.26
0.26
20.02
0.28
1.00
3.00
3.00
23.24
–0.31
1.00
2.35
2.35
21.17
0.87
0.50
Other information
Capital employed, MSEK3)
Net debt, MSEK3)
3,186
1,039
2,950
1,088
2,958
1,026
2,617
498
2,289
460
Other key ratios
Capital turnover rate, times
Equity ratio, %
Interest coverage ratio, times
Debt/equity ratio, times
1) The figures have not been recalculated as a result of the revised standard IAS 19 Employee Benefits
2) The Board proposes a dividend of SEK 1.00 per share for the year 2014.
3) Closing balance.
Head Office
GUNNEBO AB
Box 5181
402 26 GÖTEBORG
www.gunnebogroup.com
Tel: +46 10 209 50 00
E-mail: info@gunnebo.com
President and CEO: Per Borgvall
Region EMEA
Region Americas
SVP: Tomas Wängberg
LATIN AMERICA
BRAZIL
Gunnebo Gateway S.A.
www.gunnebo.com.br
www.gateway-security.com.br
Tel: +55 11 3732 6626
E-mail: gunnebo@gunnebo.com.br
Country Manager: Rubens Bulgarelli
Filho
MEXICO
Gunnebo Mèxico, S.A. de C.V.
www.gunnebo.com
Tel: +52 1 5531 4621 103
Country Manager: Jordi Riart
NORTH AMERICA
Regional Manager: John Haining
CANADA
Gunnebo Canada Inc.
www.gunnebo.ca
Tel: +1 905 595 4140
E-mail: info.ca@gunnebo.com
Country Manager: Troy McCleary
USA
Hamilton Safe Inc.
www.hamiltonsafe.com
www.gunnebo.us
Tel: +1 513 874 3733
E-mail: info.sales@hamiltonsafe.com
Country Manager: John Haining
AUSTRALIA, NEW ZEALAND
Gunnebo Australia Pty Ltd
www.gunnebo.com.au
Tel: +61 2 9852 0700
E-mail: info.au@gunnebo.com
E-mail: info.nz@gunnebo.com
Country Manager: Dan Turner
INDIA
Gunnebo India Ltd.
www.gunnebo.in
Tel: +91 22 67 80 35 00
E-mail: info@gunnebo.in
Country Manager: Sabyasachi
Sengupta
CHINA
Gunnebo Security (China) Co., Ltd.
www.gunnebo.cn
Tel: +86 21 54662978 (Sales and
purchasing)
Tel: +86 512 50338950 (Factory)
E-mail: info.cn@gunnebo.com
Country Manager: Chris Dai
SOUTH-EAST ASIA
Regional Manager: Ravindran
Gengadaran
INDONESIA
Gunnebo Indonesia
www.gunnebo.com/id
Tel: +62 21 314 8383
E-mail: info.id@gunnebo.com
Country Manager: Hindra Kurniawan
MALAYSIA
Gunnebo Malaysia Sdn Bhd
www.gunnebo.com.my
Tel: +603 8024 3050
Country Manager: Ravindran
Gengadaran
SINGAPORE
Gunnebo Singapore Pte Ltd
www.gunnebo.sg
Tel: +65 6270 6698
E-mail: info.sg@gunnebo.com
Country Manager: Ravindran
Gengadaran
SOUTH KOREA
Gunnebo Korea Co. Ltd
www.gunnebo.com
Tel: +82 2 2081 1480
Country Manager: Ryan Kim
Corporate Functions
ENTRANCE CONTROL
Tel: +44 1825 746 120
SVP: Robert Hermans
MARKETING & SERVICE
Tel: +46 10 209 50 00
SVP: Anna Almlöf
OPERATIONS
Tel: +46 10 209 50 00
SVP: Lars Thorén
HUMAN RESOURCES &
SUSTAINABILITY
Tel: +46 10 209 50 00
SVP: Magnus Lundbäck
FINANCE & INVESTOR RELATIONS
Tel +46 10 209 50 00
CFO: Christian Johansson
96 SOUTHERN EUROPE
NORDIC REGION
ITALY
Gunnebo Italia S.p.A.
www.gunnebo.it
Tel: +39 02 267 101
E-mail: info.it@gunnebo.com
Country Manager: Marco Depaoli
Regional Manager: Tom Christensen
DENMARK
A/S Gunnebo Nordic
www.gunnebo.dk
Tel: +45 70 10 56 00
E-mail: info@gunnebo.dk
Country Manager: Tom Christensen
FINLAND
Gunnebo Nordic Oy
www.gunnebo.fi
Tel: +358 10 219 3480
E-mail: info@gunnebo.fi
General Manager: Päivi Laaksomies
NORWAY
Gunnebo Nordic A/S
www.gunnebo.no
Tel: +47 22 90 03 00
E-mail: info@gunnebo.no
Country Manager: Torgeir Abusdal
Region Asia-Pacific
SVP: Sacha de La Noë
(Europe, Middle East and Africa)
SVP: Morten Andreasen
GUNNEBO GATEWAY
www.gateway-security.com
Tel: +46 141 215 070
General Manager: Björn Skoog
SWEDEN
Gunnebo Nordic AB
www.gunnebo.se
Tel: +46 10 209 51 00
E-mail: info@gunnebo.se
Country Manager: Morten Henriksen
CENTRAL EUROPE
Regional Manager: Patrick van Aart
BELGIUM, LUXEMBOURG
Gunnebo Belgium SA/NV
www.gunnebo.be
Tel: +32 2 464 19 11 (Belgium)
Tel: +35 2 49 05 06 (Luxembourg)
E-mail: info.be@gunnebo.com
Country Manager: Frederik De Broyer
NETHERLANDS
Gunnebo Nederland BV
www.gunnebo.nl
Tel: +31 203 988 988
E-mail: info.nl@gunnebo.com
Country Manager: Patrick van Aart
(acting)
SWITZERLAND
Gunnebo Suisse SA
www.gunnebo.ch
Tel: +41 22 363 7777
E-mail: info.ch@gunnebo.com
(acting)
GERMANY, AUSTRIA
Gunnebo Deutschland GmbH
Gunnebo Österreich GmbH
www.gunnebo.de
www.gunnebo.at
Tel: +49 89 2441 63500 (Germany)
Tel: +43 7229 820 50 (Austria)
E-mail: info@gunnebo.de
E-mail: info@gunnebo.at
Regional Manager: Darío Vicario
PORTUGAL
Gunnebo Portugal S.A.
www.gunnebo.pt
Tel: +351 218 315 600
E-mail: info.pt@gunnebo.com
Country Manager: Carlos Valpradinhos
SPAIN
Gunnebo España S.A.
www.gunnebo.es
Tel: +34 902 100 076
E-mail: info.es@gunnebo.com
Country Manager: Darío Vicario
FRANCE
Gunnebo France S.A.S
www.gunnebo.fr
Tel: +33 1 34 65 65 34
E-mail: info@gunnebo.fr
Country Manager: Michael Gass
UK, IRELAND
Gunnebo UK Ltd
www.gunnebo.co.uk
Tel: +44 1902 455 111
E-mail: enquiries.uk@gunnebo.com
Country Manager: Paul Hutchinson
AFRICA, MIDDLE EAST AND
EASTERN EUROPE
Regional Manager: William Mouat
CZECH REPUBLIC
Gunnebo CZ s.ro.
www.gunnebo.cz
Tel: +420 266 190 200
E-mail: info.cz@gunnebo.com
Country Manager: Viktor Bartušek
HUNGARY
Gunnebo Magyarország Kft.
www.gunnebo.hu
Tel: +36 1 465 6080
E-mail: iroda@gunnebo.com
Country Manager: István Roszmann
POLAND
Gunnebo Polska Sp. z o.o.
www.gunnebo.pl
Tel: +48 62 76 85 570
E-mail: polska@gunnebo.com
Country Manager: Jurek Szkalej
UAE
Gunnebo Middle East FZE
www.gunnebo.ae
Tel: +971 4 701 7837
E-mail: info.ae@gunnebo.com
Country Manager: Jacob Touma
SOUTH AFRICA
Gunnebo South Africa (Pty) Ltd
www.gunnebo.co.za
Tel: +27 11 878 23 00
E-mail: info.za@gunnebo.com
Country Manager: Hannes Venter
Gunnebo Glossary
ORGANISATION
PRODUCTS AND SOLUTIONS
CUSTOMER SEGMENTS
Region EMEA (Europe, Middle East
& Africa)
Cash Handling
Bank
Solutions designed to make cash handling
safer and more efficient. Cash handling
occurs throughout the cash cycle and
involves central banks, bank branches,
retailers, CIT companies and the general
public.
Central, national, regional and local banks,
pawn shops and other financial institutions.
The region for all business within the
sales companies for Austria, Belgium,
Czech Republic, Denmark, Finland,
France, Germany, Hungary, Ireland, Italy,
Luxembourg, the Middle East, Netherlands,
Norway, Poland, Portugal, South Africa,
Spain, Sweden, Switzerland and the UK.
Safes & Vaults
The region for all business within the
sales companies for Australia, China,
India, I ndonesia, Malaysia, New Zealand,
Singapore and South Korea.
Safes and vaults that are certified to resist
burglary, fire and explosives. Also includes
deposit safes, fireproof filing cabinets,
safes for the protection of digital media,
bank vaults, modular vault rooms and safe
deposit lockers.
Region Americas
Entrance Security
The region for all business within the sales
companies for Brazil, Canada, Mexico and
the USA.
A Gunnebo subsidiary responsible for local
sales and marketing. Gunnebo has its own
sales companies in 33 countries.
Solutions that allow authorised entry and
prevent unauthorised access to sites and
buildings. Includes speed gates, turnstiles,
interlocking doors and security doors.
Entrance Security also includes ticket gate
solutions for mass transit systems and airport gates for fast boarding, immigration
control and security checks.
Operations
Electronic Security
Operations is responsible for Gunnebo’s
manufacturing units, purchasing, logistics,
technical support for the Group’s sales
companies, and research and development.
Solutions for the integration of security
systems. Includes access control, intrusion
detection, electronic locks and remote surveillance systems.
Region Asia-Pacific
Sales company
NCN (Non-Conformance Note)
Gunnebo’s fault reporting system for
quality complaints.
Retail
Shops, restaurants, casinos, mass transit,
post offices, public services such as libraries and other organisations outside of the
bank segment that handle cash in their
day-to-day operations.
CIT (Cash in Transit)
A company that transports money
between different units in the cash
handling process, such as from a shop or a
central bank to a counting centre.
Mass Transit
Public rail, bus and metro networks and
airports, which transport large volumes
of passengers.
Industrial & High-Risk Sites
Includes factories, logistics companies,
power plants, stadia, ports, prisons and
casinos.
Public & Commercial Buildings
Includes company and government offices,
administrative centres and public buildings.
OTHER
Near Field Communication (NFC)
Used for contactless transactions and
exchange of data, enabling devices such as
smartphones to communicate with other
devices when placed near each other.
Disclaimer
This report contains future-oriented information. It reflects the
management’s current perceptions of certain future events and the
possible ensuing results. No guarantees can be given that these perceptions will prove to be correct. Actual future results may vary considerably from the information supplied in this report, partly due to
changes in circumstances regarding the economy, market and competition, changed legal requirements and other political measures,
variations in exchange rates, business risk assessments and other
factors mentioned in this annual report.
Gunnebo Annual Report 2014 Production: Gunnebo in cooperation
with Newsroom
Printing: INEKO
Paper, cover: Tom&Otto Silk 300g
Paper, insert: Tom&Otto Silk 150g
This product can be recycled as paper.
97
ANNUAL REPORT 2014
services and solutions with an offering covering cash handling, safes
and vaults, entrance security and electronic security for banks, retail,
CIT, mass transit, public & commercial buildings, and industrial
& high-risk sites.
The Group has an annual turnover of €610 million and 5,700
employees in 33 countries across Europe, the Middle East & Africa,
Asia-Pacific and the Americas as well as a network of Channel Partners
The Gunnebo Security Group is a global supplier of security products,
on 100 additional markets.
For a safer world.
TAKING
SECURITY
INTO THE FUTURE

Gunnebo-Annual-Report-2014

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